OYO under Income Tax glare for non-deduction of TDS in FY17

Trouble for budget hotel chain OYO has been rising as after concerns of users over real-time data sharing with state governments, the company has come under income tax glare for providing in incorrect particulars of income for the year 2016-17.

The IT department has sent notices to its parent firm Oravel Stays.

The case is linked to non-deduction of tax deducted at source (TDS) on payments made by the company, reports Economic Times citing anonymous sources.

In 2016-17, OYO had reported its losses over Rs 400 crore. The IT department has passed an order against the budget hotel firm for irregularities. OYO has now filed an appeal against the order.

“OYO Hotels & Homes is fully compliant with the payment of all taxes, and as a responsible citizen been abiding by all the laws of the land. On the claims raised by the Income Tax Department, OYO has filed an appeal with the appropriate appellate authority, and the matter is currently sub-judice. We continue to engage proactively with the tax authorities on all concerns arising thereof," said OYO's spokesperson in an email statement.

Over the past few months, Gurugram-based hotel chain has been also entangled in a fight with industry association body FHRAI and other hotel associations over matters of mismanagement, arbitrary contract changes, payment deduction and deep discounting.

However, OYO denied all the allegations made by hotels. It said the company determines price through the dynamic pricing mechanism. It also warned strict legal action for breach of contract against any hotel on its platform that boycotts bookings.

Last week, the company's move to digitize the arrival and departure register and allow the state governments to obtain that information in real time also came under criticism by customers and experts over the privacy issue.

OYO after raising $800 million from Softbank last year, has been on expansion mode. It claims to have a presence in over 500 cities in seven countries. Recently, it began operations in Portugal and Spain.

Softbank backed firm aims to become the world’s largest chain globally in the next two years. India still remains its top consolidated revenue earner with over 1.6 lakh room inventory. Globally, the firm claims to add 64,000 rooms every month.