FHRAI Flags Agoda Over GST Compliance and Unfair Commission Practices
By Author | April 21, 2025
Category: GST News India 2025
Keywords: Agoda GST issue, FHRAI news, hotel commission dispute, online travel platform India, GST compliance hotels
Agoda’s Commission Policy Sparks Industry-Wide Alarm
The Federation of Hotel & Restaurant Associations of India (FHRAI) has raised serious concerns about Agoda’s recent commission policy. The global online travel platform allegedly violated GST compliance norms while also engaging in practices that financially burden Indian hotels.
Reference Sell Rate Model: Core of the Controversy
Agoda introduced the “Reference Sell Rate” (RSR) model, which calculates commission based on the full room tariff—including GST. According to FHRAI, this contradicts earlier agreements where commissions were to be calculated solely on the pre-tax base room rate.
This change means Indian hotels are paying commission on tax amounts, raising costs at a time when many are still recovering from the COVID-19 crisis.
GST Irregularities in Agoda’s Billing Practices
FHRAI further flagged major GST-related violations, including:
- Charging commission on GST: A practice not permitted under Indian tax law.
- Non-compliant invoicing: Agoda reportedly fails to issue proper GST invoices for its commission, creating confusion over input credit and shifting liability to hotels.
These issues, if verified, could indicate a breach of the Goods and Services Tax Act and may warrant regulatory intervention.
Hotel Owners Raise Operational Concerns
Besides tax violations, FHRAI compiled a list of operational grievances from hotel partners:
- Unauthorized discounts applied to listings without consent.
- Delayed payments, unless hotels agree to pay higher commissions.
- Rate plans changed unilaterally, leaving hotels uninformed.
- Booking redirection to rival sites, affecting visibility and revenue.
These practices, according to FHRAI, damage trust and disrupt fair market operations.
FHRAI Demands Immediate Action from Agoda
In a formal statement, FHRAI’s President said:
“India’s hospitality sector is striving to bounce back post-COVID. Platforms like Agoda must respect contractual obligations and comply with Indian tax laws. Any deviation harms not just hoteliers but the entire ecosystem.”
FHRAI is calling for Agoda to reverse its new commission model, honor existing agreements, and follow proper GST compliance procedures.
Why It Matters for India’s Hospitality Sector
This case shines a spotlight on the increasing tension between online travel aggregators (OTAs) and hotels in India. As more properties rely on digital platforms, transparency and legal compliance are essential for building sustainable partnerships.
Hoteliers are advised to:
- Reassess OTA contracts.
- Monitor GST invoice formats carefully.
- Report non-compliant practices to regulators.
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