Frequently book movie tickets online through a mobile app or a website? Find out why RBI has just labelled that extra ‘internet handling fee’ as illegal! #ConsumerRights
BookMyShow, a leading online ticket vendor, and PVR, the multiplex chain, have come recently come under the microscope for charging an extra ‘internet handling fee’ which is added to each movie ticket purchased on their app or website.
Responding to an RTI filed by Vijay Gopal, the president of the Hyderabad-based ‘Forum Against Corruption,’ the RBI said that these platforms do not have the authority to levy the fee.
They further added that it is a gross violation of the central bank’s Merchant Discount Rate (MDR) regulations.
Following this revelation, Vijay Gopal has moved a consumer court in Hyderabad against BookMyShow, PVR and the Department of Information Technology, for their apparent inability to enforce this important regulation.
The case is scheduled for hearing on March 23, 2019.
So, what is MDR?
It is a payment gateway fee that the merchant (which in this case is BookMyShow) pays to the bank for accepting payment from its customers using their debit or credit cards.
Unlike the customer, it’s the merchant who has to pay MDR and has no authority to pass on the cost to the consumer.
In the parlance of online entities like BookMyShow, the ‘internet handling fee’ amounts to the additional booking fee (ostensibly to offset the MDR they have to pay) plus the integrated GST (IGST), on top of the original ticket price you’re already paying.
For example, if you purchase a premium ticket at the Cinepolis in Orion East Mall, Bengaluru, you have to pay a total of Rs 297.76, which includes the original ticket price of Rs 260 plus Rs 32 as ‘Booking Fees’ and IGST amounting to Rs 5.76.
Speaking to various publications, Vijay Gopal alleged that this practice isn’t merely limited to online ticket vendors like BookMyShow. Cab services and food delivery apps also levy this charge.
He even criticized the government for its inability to track such gross violations of the RBI’s MDR regulations.
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What can you do as a consumer?
Well, the RBI responded to the RTI query stating that those who want to issue their complaint against entities regulated by the central bank can visit https://rbi.org.in/scripts/complaints.aspx.
Reporting a violation will require the consumer to approach the specific bank that the merchant is using to make that particular transaction.
If the bank does not act within the stipulated 30 days from the day of filing the complaint, or if its response leaves a lot to be desired, the customer must approach the RBI Banking Ombudsman.
(Edited by Gayatri Mishra)