The Ministry of Railways on Friday said that it has decided to withdraw the decision on Indian Railway Catering and Tourism Corporation (IRCTC) convenience fee. This comes a day after IRCTC said that it has been asked to share 50% of its revenue earned as convenience fee from bookings on its website.
“Ministry of Railways has decided to withdraw the decision on IRCTC convenience fee,” DIPAM Secretary announced in a tweet.
The online ticketing arm of Indian Railways on Thursday informed the exchanges that it was asked to share 50% of its revenue earned as convenience fee from bookings on its website with the national transporter, an arrangement that had been discontinued since the pandemic.
Convenience fees charged from customers generated a sizable revenue for both IRCTC and the Railways. The fee is not part of the rail fare. It is for the service of online ticket booking offered by the IRCTC.
IRCTC shares rebounded, though trading in the negative territory, as the stock was down 4% after the news. The stock had declined 25% in Friday’s early deals after the news of sharing half of its revenue from convenience fee with the government.
IRCTC shares turned ex-split on Thursday after the board had approved a 1:5 stock split on August 12, to help enhance liquidity in the capital market, widen shareholder base and make the shares affordable to the small investors.
The company enjoys a strong monopoly as it is the only entity authorised to manage catering services on trains and major static units at railway stations.
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