The Federation of Hotel & Restaurant Associations of India (FHRAI) has voiced strong objections to global online travel agency Agoda’s unilateral changes in its commission structure, which allegedly breach contractual agreements and Indian tax laws. In a formal complaint, FHRAI criticized Agoda’s introduction of the “Reference Sell Rate” (RSR), a model that charges commission on the total room rate including GST—contrary to agreements that specify commission be calculated only on the base room rate. The federation claims this shift has caused financial strain and operational disruptions for Indian hotel partners.
FHRAI also accused Agoda of violating Indian GST regulations by charging commission on the GST component and failing to charge GST on its own commission, effectively passing the tax burden onto Indian hotels. This practice, the association warns, leads to complications in tax reconciliation and potential revenue losses for the government. Multiple hotels have reported other issues, including unauthorized discounts, delayed payments unless higher commissions are accepted, poor communication, and unauthorized rate plan changes.
FHRAI President K. Syama Raju emphasized the need for fair and transparent partnerships, especially as the hospitality sector recovers post-pandemic. He urged Agoda to revert to the original tax-excluded commission model, ensure full compliance with Indian tax laws, and maintain transparent, contract-based dealings with Indian hospitality stakeholders.
