FHRAI slams Agoda over tax practices

New Delhi

The Federation of Hotel and Restaurant Associations of India (FHRAI) has raised serious concerns about online travel platform Agoda. FHRAI said Agoda made sudden changes to its commission rules without consulting Indian hotels. The group represents over 60,000 hotels and 500,000 restaurants in the country.

FHRAI claims Agoda is breaking Indian tax laws. It says Agoda is charging commission on the total room cost, including GST. This goes against rules, which say commission should be on the base price only. FHRAI also accused Agoda of not collecting GST on its own commission, which shifts tax responsibility onto hotels and causes problems in tax filing.

K. Syama Raju, FHRAI President, said these actions are unfair, especially as hotels try to recover from the COVID-19 pandemic. He said Agoda’s move breaks earlier agreements and puts financial pressure on hotels.

FHRAI has asked Agoda to cancel the changes and return to the old commission model. It also wants the company to follow Indian tax rules.

A formal letter to Agoda objected to the new “Reference Sell Rate” model. Under this system, Agoda charges commission on the full amount, including taxes. FHRAI said this breaks the signed agreements.

Hotels also complained that Agoda adds discounts without permission, delays payments unless extra fees are paid, and changes rate plans without informing partners. Sometimes, Agoda even redirects bookings to other websites.

FHRAI urged Agoda to work fairly and honestly with Indian hotel partners, calling for more transparent business practices.