Service tax on e-tickets by railways may affect consumers: CCI

Competition Commission of India recently ruled that Indian Railways is not abusing its dominant position by imposing certain conditions during sale of e-tickets but was of the view that charging of service charge for the use of e-ticking may affect the consumers’ interests.

The Commission said it is of the considered view that charging of service charge for the use of e-ticking may affect the consumers‟ interests. In terms of the explicit mandate of the statute as also in view of the provisions contained in section 18 of the Act, the Commission is bound to protect the interests of consumers.

“Online ticketing has reduced the hassle of buying/selling tickets through outlets and customers no longer have to drive down or stand in long queue to get their tickets booked. It has other benefits like user friendly approach, booking tickets for other persons located in other cities who are unable to book tickets themselves, digitally stored tickets in the database, saves paper, convenience of changing/cancelling tickets, payment by card, etc. In other words, e-ticketing has only enhanced the efficiency in providing ticketing services to the passengers. However, service charges for the use of such facility seem to go against the interest of the consumers and moreover, it is non-refundable even in case of cancellation. The very purpose of e-ticketing is to enhance efficiency and provide better services to the passengers i.e. ultimately for the consumers’ welfare. Needless to say that e-ticketing needs to be promoted as it allows substantial savings in costs to the Railways who otherwise will have to make necessary arrangements for booking at reservation centres, involving investment in infrastructure and personnel. While it adds to the convenience and saving of time and efforts of consumers, it is also a source of savings for the Railways. Besides, e-ticketing is an advancement in technology which needs to be promoted whole heartedly, rather than discouraged by imposing fees and other restrictions on it. The electronic ticketing system is a typical service innovation made through the adoption of computerized systems and processes which streamlined, qualified and reduced the amount of manual processes in the operations leading to improvements in service quality. Thus, innovation in delivery of services needs to be encouraged and promoted”, the Commission enumerated.

The Commission hoped that the Railways may do away with service charges and other unnecessary restrictions on booking of e-tickets which may not affect its revenues in any significant manner.

It also noted that though the service charges imposed are not high, total exclusion of the same may advance the causes noted above and may particularly be beneficial to the larger section of society.

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