Ministry of Railways withdraws decision on convenience fee of IRCTC
The Railways Ministry has asked IRCTC to share 50% of its convenience fee, the company stated on Thursday.
Tuhin Kanta Pandey, Secretary of the Department of Investment and Public Asset Management, stated in a tweet on Friday that the Ministry of Railways has decided to reverse its decision on the convenience fee charged by the Indian Railways Catering and Tourism Corporation (IRCTC). The decision was made after the company's stock dropped as much as 25% on the BSE during morning trading.
After the decision was reversed, it regained virtually all of its losses. At 11:17 a.m., the stock was trading 3.15 percent lower at Rs885 per share.
The IRCTC announced on Thursday that the Ministry of Railways has ordered the business to contribute 50 percent of its convenience fee revenue starting next month."...it is to be informed that Ministry of Railways...has conveyed its decision to share the revenue earned from convenience fee collected by IRCTC in the ratio of 50: 50 w.e.f 1st November 2021," stated the company in a filing to the stock. exchange.
IRCTC is a Mini Ratna organisation that is the only one authorised to provide food, online ticketing, and bottled drinking water in trains and railway stations.
According to the company's annual report, it generated service charge or convenience fee of 552 crore in 2015-16 and 362 crore in 2016-17, following which the Ministry of Railways removed service charge from November 2016 to August 2019 to promote digital payments.
From September onwards, the IRCTC began collecting a convenience fee on e-ticket bookings, earning 352 crore in 2019-20 and 299 crore in 2020-21. "Due to the Pandemic, the bookings during FY2020-21 have dropped by 42.35% over FY 2019- 20. Therefore, there has been a substantial decrease in the Convenience Fee also," it stated in the report.
In addition, IRCTC CMD Rajni Hasija stated in a recent results conference for the April-June 2021 quarter that IRCTC earned about 149 crore from internet ticketing during the quarter by booking around 6.37 crore tickets. Around 69 percent of these profits came from convenience fees.
