FHRAI raises red flag over Agoda’s commission practices and GST compliance issues

The Federation of Hotel & Restaurant Associations of India (FHRAI) has voiced strong concern over unilateral changes introduced by global online travel platform Agoda, particularly its decision to alter commission structures and booking practices for Indian hotel partners.

According to FHRAI, Agoda’s newly introduced “Reference Sell Rate” (RSR) calculates commission on the total room rate inclusive of GST, contrary to existing agreements, which clearly stipulate commission should apply only to the pre-tax room rate. The association warned that this shift is placing undue financial pressure on hotel operators already navigating a fragile post-pandemic recovery.

The federation also raised questions over Agoda’s compliance with India’s GST framework. FHRAI alleges that Agoda has not only charged commission on the GST portion of the room tariff, which is prohibited, but has also avoided applying GST on its own commission invoices—potentially pushing the tax burden onto Indian hotels and complicating GST reconciliation.

In addition to the commission dispute, FHRAI cited several operational grievances from its members. These include unauthorized promotional discounts applied without hotel consent, payment delays that could be resolved only by paying extra commission for early release, and a lack of direct communication from Agoda’s local representatives. Hotels have also reported instances where Agoda modified rate plans without prior notice and even redirected bookings to competing platforms.

FHRAI President stressed the importance of equitable partnerships, stating, “India’s hospitality sector is working hard to recover and rebuild in the post-pandemic era. Unilateral decisions by platforms like Agoda undermine the principles of fair collaboration and violate both legal and contractual commitments.”

The federation has called for Agoda to reverse the changes, honour original contracts, and adhere to Indian tax regulations to preserve transparency and trust in the hospitality ecosystem.

Source #ET