Railways seek reimbursement for IRCTC service charge

With the finance ministry starting the process for listing of Indian Railway Catering and Tourism Corporation (IRCTC), Indian Railway Finance Corporation (IRFC) and Ircon International (Ircon), the loss of service charge for IRCTC has become a cause for concern for railway officials.

The government waived the service charge following demonetisation to encourage cashless transactions.

The railway ministry has written to the finance ministry seeking reimbursement of the loss amounting to over Rs 500 crore on an annualised basis. IRCTC shares half of this service charge revenue with the railways.

Officials said the process for appointment of merchant bankers was under way with ICICI Securities and IDFC making presentations. The Department of Public Asset Management has set March 16 as the final date for submission of requests for quotations in this regard.

The decision to list these companies came as a surprise to the railways when Finance Minister Arun Jaitley made the announcement in his budget speech last month. The railways had written to the finance ministry on the issue of service charge before the budget as well.(READ MORE)

Unhappy with hospitality? Don't have to pay service charge while eating out

Breaking News - The government stated on Monday that any consumer may decide to refuse to pay the service charge levied by a hotel or restaurant.

This is a regrettable pronouncement on a justified practice, stated a leading hotels association.

Many restaurants and hotels levy a service charge of 5-20 per cent, usually seen as a replacement for tips. This is apart from the service tax charged from the customers. 

The Centre has told states to ensure that hotels and restaurants disseminate the information that their service charges are discretionary and voluntary, and consumers dissatisfied with the service can refuse to pay them.

The National Hotel Owners Association of India stated, later in the day, that inclusion of a service charge in a restaurant bill is a widely accepted practice, recognised by various state governments and the Centre, and reinforced through judicial pronouncements.

Also, that the levy is a matter of policy for an eatery, which should display it. Thereafter, it is for the consumer to decide if he or she wishes to avail of the facility offered at the place, the body said.(Read More)