Govt orders probe over exorbitant cancellation charges by online booking portals, warns of action

UNion government minister of consumer affairs Pralhad Joshi on sat said that he has ordered a dig into into usurious cancellation charges face of the earth imposed by online air ticket booking platforms. Joshi said that charging beyond what is disclosed at the time of booking undermines the transparency and consumer trust.“I have directed the Department of Consumer Affairs and CCPA to investigate whether online ticket booking platforms are imposing excessive cancellation charges on consumers, beyond what is charged by airlines or disclosed at the time of booking. Have directed them to check other online ticket booking platforms too,” Joshi wrote on X.He added that if such practices are found to be unfair or in violation of consumer rights, it may amount to Unfair Trade Practices under the Consumer Protection Act, 2019. “CCPA will take necessary action, including class action measures wherever appropriate, to protect consumer interests and ensure fair treatment of consumers.”The Union minister's announcement came after Bharatiya Janata Yuva Morcha (BJYM)'s national secretary Tajinder Bagga wrote on X that he had mistakenly booked a flight for Navi Mumbai instead of Mumbai. And when he tried cancelling via online booking portal, Agoda, it showed cancellation fee of ₹4,764 and refund of just ₹1,571. However, Akasa Air website showed cancellation charge of just ₹299 and refund amount of ₹6,076. Air fare surge after Middle East war The war in the Middle East has majorly impacted the aviation sector as fuel prices continue to surge due to virtual closure of the Strait of Hormuz that carries world's 20% energy supplies. The Delhi government last week slashed the Value Added Tax (VAT) on Aviation Turbine Fuel (ATF) from 25% to 7% for a period of six months as it cited rising financial pressure on the aviation sector amid recent global geopolitical developments, HT reported earlier.Chief minister Rekha Gupta said the move was aimed at maintaining Delhi’s economic competitiveness and supporting aviation, tourism and logistics activities in the Capital.“The concessional VAT rate on ATF will initially remain in force for six months. The decision has been taken in the interest of both the nation and Delhi,” Gupta said, adding that the measure could result in an estimated revenue loss of nearly ₹985 crore to the Delhi government.According to officials, ATF accounts for nearly 40% of airlines’ operational costs, with airlines currently paying both VAT and central excise duty on fuel purchases from oil companies. The government said high tax rates have a direct impact on ticket prices and the financial health of airlines.Gupta said VAT on ATF contributes nearly ₹1,368 crore annually, accounting for around 19% of Delhi’s total annual VAT collection. She added that the decision aligns with Prime Minister Narendra Modi’s focus on strengthening connectivity and economic activity.