According to a report by Outlook, The hospitality industry in Rajasthan is grappling with allegations of fraud against Oyo Rooms, one of India’s largest online hotel booking platforms. Hoteliers in Jaipur have accused the company of inflating earnings through fake bookings, leading to significant financial burdens for local operators. The accusations have triggered a wave of GST recovery notices, penalties, and interest charges from tax authorities, pushing hotel owners into a precarious position.
According to Hussain Khan, President of the Hotel Federation of Rajasthan, the situation has emerged as a major challenge for the industry, with over 100 hotels receiving GST notices linked to these alleged fraudulent transactions. Operators have reported that Oyo booked rooms online only to cancel them immediately, leaving GST liabilities that hotel owners are forced to bear. In Jodhpur, similar complaints have surfaced, with more than ten hoteliers facing SGST and CGST notices over the last six months.
The allegations include startling cases, such as that of Samskara Resort, where Oyo reportedly showed bookings worth INR 22.51 crore, resulting in a GST demand of INR 2.66 crore. The resort’s director, Madan Jain, highlighted that Oyo’s records included bookings from 2016, despite the resort not existing at the time. Another operator from Kartikeya Hotel revealed that the GST department recorded earnings of INR 44 crore for the property in 2023-24, which they claim were artificially inflated, resulting in a INR 4 crore recovery notice.
The fallout has prompted legal action, with one hotel filing an FIR against Oyo’s founder, Ritesh Agarwal, at the Adarshnagar police station in Jaipur. Industry representatives are calling for greater transparency and stricter regulations for online booking platforms to safeguard the interests of hoteliers.
Source: Outlook
According to Oyo, “This seems to be a case of GST dispute of the hotelier. He may not have paid GST on walk-in guests and is trying hard to involve OYO wrongly to deflect the matter. Our records clearly show that most of his bookings are walk-ins which his employees would have recorded directly. So, there is no basis for fake bookings. We are confident of getting the misleading FIR quashed.
It’s absolutely clear that the complaint is against ‘unknown person’ and not Ritesh Agarwal.“
