A tax tribunal has ruled that Oravel Stays Private Limited, the company which runs OYO Rooms, is not required to pay the tax deducted at source (TDS) on the minimum guarantee payments made to hotels.
The Delhi-based Income Tax Appellate Tribunal (ITAT) observed that hotels conduct their operations in terms of providing lodging and accommodation services whereas OYO Rooms provides technology, sales, and marketing services through its platformOYO Rooms assures minimum benchmarks, occupancy of hotels and in case such benchmark is exceeded, the service fee is payable by the hotel and in case of shortfall, the former is required to meet the same.