‘Internet handling fee’ under scrutiny

‘Internet handling fee’ under scrutiny

RBI says it has not permitted any movie ticket booking site or payment platform to charge extra under heads such as ‘convenience’ and ‘Internet handling'

Wondered why you pay an additional charge when you go online and book a movie ticket or flight ticket? Convenience charge, aka Internet handling fee, is actually something you pay extra for using the online platform. 

So when Vijay Gopal, consumer rights activist based in Hyderabad, filed a complaint against PayTM and Inox for charging Internet handling fees, many questions came up.

Is it illegal to charge a handling fee? What can customers do about it? And where does all the money go?

According to Gopal’s complaint, PayTM had collected a convenience fee, booking charges and cancellation charges, adding Rs 80 to two movie tickets priced at Rs 276.

He says the extra charges are illegal and not authorised by the government or the Reserve Bank of India. 

According to the IT Act 6A (3) section, digital service providers are not allowed to charge such a fee without permission.

For a service provider to collect, retain and appropriate service charges, they need permission from the RBI.

In response to an RTI query from Gopal, RBI said it had not authorised any e-commerce portal, e-wallet or service provider to levy charges for usage of the Internet.

The Ministry of Electronics and Information Technology has also not given any permission to charge customers over and above the ticket rates.

BookMyShow told Metrolife they could not offer any comment as the matter was subjudice. 

Reality check

Metrolife tried to book a ticket for Avengers: Endgame for May 2, 10 pm,at INOX Garuda Mall, using PayTM and BookMyShow.

PayTM: Rs 75 more than the counter

The ticket was Rs 264 each. Under Tax and Fees came Convenience Fee of Rs 64, Central GST of Rs 5.76 and State GST of Rs 5.76. So overall, the total for two tickets came to Rs 603.52.

BookMyShow: Rs 77 more than at counter

BookMyShow was cheaper than PayTM by Rs 78 for the same show, same multiplex. Tickets for two showed Rs 528. Added to it was an Internet Handling Fee of Rs 75.52 (base amount of Rs 64 and integrated GST at 18 per cent Rs 11.52). The total was Rs 605.52.

What can you do?

Swamy K B K, advocate, describes the charges as an infringement of the consumer’s rights. “Online portals aren’t supposed to charge anything other than the ticket fare,” he says. People in the cities haven’t taken it up as a collective case. “They keep quiet because they have money. They don’t want to take the risk of questioning such malpractice,” he says.

If complaints pour in, the authorities will have to act, he told Metrolife. Legal experts say the RBI’s merchant discount rate (MDR) policy does not allow Internet handling fees to be passed on to the customer. The MRD is paid by the merchant to the bank, as in the case of debit and credit card transactions on sites such as Amazon and Flipkart. Online booking sites serving movie buffs are passing on the burden to customers.