IRCTC to share 50% of convenience fee with Ministry of Railways
New Delhi. The Indian Railway Catering & Tourism Corporation Limited (IRCTC), will hand over half of the convenience fee charged from the customers to the government. IRCTC informed the stock market about this today. The company said in a letter sent to the stock exchange that the Ministry of Railways has asked to share the amount raised by the company in the convenience fee in the ratio of 50:50. This decision will come into effect from November 1.
IRCTC charges a convenience fee from customers availing services through its website, till now 100% of this income was kept in IRCTC's account. However, now half of this will have to be given to the government. If market experts are to be believed this, this is expected to lead to a sharp decline in the company's own earnings, as the convenience fee accounts for a large part of the company's total income. IRCTC provides a catering service along with the booking of tickets. Along with this, IRCTC also offers special packages and services related to tourism.
The effect of the second wave of Corona was seen in the results of the first quarter of CPSEs under the Ministry of Railways. In the first quarter, the company's profit had come down by 23 percent to Rs 103.8 crore as compared to the previous year. At the same time, the income was at Rs 338.8 crore, down by 41 percent. According to the information given by the company, IRCTC earned a total of Rs 299 crore as a convenience fee in the year ended 31 March 2021. The income from operations this year under the impact of Kovid was Rs 783 crore. While the facility charges were at Rs 350 crore a year ago, the total income from operations stood at Rs 2264 crore.
IRCTC will also release its second-quarter results on November 1.
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