Railway tickets may get cheaper as govt mulls removal of MDR charges

New Delhi: The government is considering to withdraw the merchant discount rates (MDR) levied on e-tickets that could slash ticket prices for railway passengers.

MDR charges are applicable for those who book tickets online via IRCTC website.

The charges are levied by banks on customers for providing credit/debit card services. As indicated by railway minister, the government is in talks with banks to resolve the issue of MDR.

Earlier, railways used to charge a service charge, prior to demonetisation. As soon as the service charges were removed post demonetisation, digital transactions accelerated.

Ticket prices would automatically fall for passengers booking via IRCTC portal after MDR charges are eliminated.

Rail passengers will also continue to enjoy service charge exemption on tickets booked online till March 2018.

The government had waived service charges after demonetisation in November last year to encourage digital modes of booking.

The facility had been extended to June 30 and then September 30. Service charges on booking train tickets online through IRCTC ranges from Rs 20 to 40 per ticket.

In a September 29 missive to the Indian Railway Catering and Tourism Corporation (IRCTC), the ticketing agency of the railways, the Railway Board directed that the benefits be extended till March next year.

Senior railway officials say that almost 33 percent of the IRCTC revenue comes from the service charge collected on online bookings. As per the revenue collection of the last financial year, about Rs 540 crore of IRCTC's revenue of over Rs 1,500 crore came from ticket bookings.

An amount of around Rs 184 crore has not been realised from passengers on account of service charge and service tax thereon on reserved tickets booked online from November 23, 2016 to February 28, 2017, according to railways data.