Railway Ministry withdraws decision on IRCTC convenience fee
By Team Newsable | First Published Oct 29, 2021, 11:45 AM ISTThe secretary of the Department of Investment and Public Asset Management acknowledged this decision on the social media site Twitter.
The Railway Ministry has reversed its decision that asked the Indian Railway Catering and Tourism Corporation (IRCTC) to share 50 per cent of the revenue from convenience fees. The secretary of the Department of Investment and Public Asset Management acknowledged this rollback of the decision on the social media site Twitter.
This action followed a significant drop in IRCTC shares on Friday. On October 28, the Railway Ministry requested that the Indian Railways' e-ticketing and catering arm share money with the ministry. Following the railway ministry's decision, IRCTC shares fell as much as 29% to an intraday low of 650.10 on the BSE on Friday.
Ministry of Railways has decided to withdraw the decision on IRCTC convenience fee pic.twitter.com/HXIRLxXTlL
— Secretary, DIPAM (@SecyDIPAM)Latest Videos
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According to the annual report, IRCTC received Rs 299.13 crore from the convenience charge in 2020-21. This was the IRCTC's most significant revenue earner in 2020-21 since revenues from catering, and comprehensive services dropped dramatically owing to Covid-related limitations. However, the income fell as a result of the Covid-19 outbreak in India and related travel restrictions. In 2019-20, IRCTC earned Rs 349.64 crore.
The IRCTC began sharing earnings with Indian Railways on an 80:20 basis in 2014. Later that year, in 2015, the ratio was modified to 50:50. However, the income sharing mechanism was eventually suspended for three years, beginning in November 2016. For non-AC classes, the IRCTC charges Rs 15 plus GST, whereas, for AC classes, the rate is Rs 30 plus GST (including first-class). The convenience cost for BHIM/UPI payments is decreased to Rs 10 plus GST per ticket for non-AC classes and Rs 20 plus GST for AC classes.
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The state-owned IRCTC is the only company authorised to operate food services aboard trains and has a monopoly in the Indian Railways' online ticketing and catering services.
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