GST on Train Tickets – Rates for Sleeper, AC & First Class

Mahima was shocked to see that her AC 3-tier rate of ₹1,000 had 5% GST added to it when she booked her train ticket on the IRCTC website, making the total ₹1,050. While sleeper, 2S, and general class tickets are GST-free (0%), Indian Railways charges 5% GST on AC and First Class tickets. 

GST is assessed even in cancellations; for example, if a cancellation cost of ₹240 is applicable, an additional ₹12 GST is imposed, for a total of ₹252. This numerical analysis shows how GST affects the cost of rail travel for all classes.

GST on Train Tickets – Create a Table Mentioning Different Categories of Train Tickets with Price and Applicable GST Rate
 

Key Notes:

• Cancellation Charges: GST is applicable on cancellation charges for AC and First Class tickets. For instance, a ₹240 cancellation fee incurs ₹12 GST, totaling ₹252.
   
• Input Tax Credit (ITC): GST-registered business travellers can claim ITC on GST paid for AC and First Class tickets.
   
• Exemptions: Services like platform tickets, retiring rooms, and cloakroom facilities are exempt from GST.

GST on Ticket Cancellations: What You Should Kno?

If you're considering cancelling a confirmed train ticket, it's essential to understand the Goods and Services Tax (GST) implications, particularly for AC and First Class tickets.

GST Applicability on Cancellation Charges:

As per the Finance Ministry's circular dated August 3, 2022, cancellation charges for AC and First Class tickets attract a 5% GST, aligning with the GST rate applicable to the original ticket fare.

Example:
 

• Ticket Fare (AC 3-tier): ₹1,000
   
• Cancellation Charge: ₹180
   
• GST on Cancellation Charge: ₹9 (5% of ₹180)
   
• Total Cancellation Cost: ₹189

In this scenario, the GST on the cancellation charge is retained by Indian Railways.

No GST on Non-AC Classes:

Cancellation charges for Sleeper Class, Second Sitting, and General Class tickets do not attract GST.

Refund Process:

Upon cancellation, the original ticket fare and the GST paid at the time of booking are refunded in full. However, the cancellation charge and the associated GST are retained by Indian Railways.

Impact of GST on the Train Tickets Industry with Examples
 

Key:

• ITC = Input Tax Credit
• Prices are indicative and used for illustrative purposes

Input Tax Credit (ITC) on Train Tickets

Under India's Goods and Services Tax (GST) framework, the Input Tax Credit (ITC) allows businesses to reclaim the tax paid on eligible purchases. However, when it comes to train travel, the applicability of ITC varies based on the class of travel and the purpose of the journey.

Claiming ITC on Train Tickets

AC and First Class Tickets:

• GST Rate: 5%
• ITC Eligibility: Available for business-related travel.
• Example: If a business traveller books an AC 3-tier ticket for ₹1,000, they can claim ₹50 as ITC, provided the trip is for official purposes and the GSTIN is provided during booking.

Sleeper Class and Second Sitting Tickets:

• GST Rate: Exempt (0%)
• ITC Eligibility: Not applicable, as no GST is charged.

Platform Tickets and Ancillary Services:

• GST Rate: Exempt (0%)
• ITC Eligibility: Not applicable.

Non-Eligible Expenses:

ITC cannot be claimed on:

• Personal Travel: Trips not related to business activities.

FAQs Related to GST on Train Tickets

1. What is the GST rate on train tickets?

GST at 5% is applicable on AC and First Class tickets, while Sleeper and Second Sitting tickets are exempt.

2. Is GST applicable on ticket cancellations?

Yes, 5% GST is charged on cancellation fees for AC and First Class tickets; no GST for non-AC classes.

3. Can I claim GST paid on train tickets?

Yes, input tax credit can be claimed if the ticket is used for business and a GST invoice is available.

4. Is GST applicable on IRCTC ticket bookings?

Yes, all tickets booked via IRCTC or counters include GST in the final fare for eligible classes.

5. Are any railway services exempt from GST?

Yes, services like platform tickets, cloakroom, and retiring rooms are GST-exempt from July 15, 2024.

6. Is GST charged on season tickets?

Yes, 5% GST is levied on AC and First Class season tickets, while others remain tax-free.

7. How is GST calculated on train fares?

GST is 5% of the base fare and is added to the ticket price automatically at booking.