Jaipur Resort Receives INR 2.66 Crore "Wrong" GST Notice, Lodges Formal Complaint Against OYO

After getting GST show cause notifications totalling INR 2.66 Cr, a resort in Jaipur is said to have filed a formal complaint against OYO and its co-founder, Ritesh Agarwal. According to a media report, Madan Jain, who works for Samskara Resorts, filed a formal FIR at the Ashok Nagar police station in Jaipur last week. The complainant claims that OYO gave "inaccurate information" that led to the notices. The FIR cites a number of people in addition to OYO and Agarwal for criminal conspiracy, forgery, cheating, and criminal breach of trust under the Bharatiya Nyaya Sanhita (BNS). According to the FIR, on April 18, 2019, Samskara Resorts in Jaipur and OYO inked a 12-month contract. The resort says it paid the GST owed because it saw commercial transactions worth INR 10.95 lakh during that time. In addition to the penalty, the FIR alleges that OYO made reservations with Samskara for INR 22.22 Cr during the fiscal years 2018–19, 2019–20, and 2020–21, for which the GST bill of INR 2.66 Cr is still outstanding.

20 Hotels Received Inflated Bills

Husain Khan, head of the Hotel Federation of Rajasthan, told a media outlet that up to 20 hotels had got GST notices based on "inflated bills" that OYO allegedly provided. The Federation launched a campaign against OYO four years ago, Khan claimed, citing the company's "poor record" with hotels. OYO, which Agarwal founded in 2012, provides corporate stays, affordable hotels, coworking spaces, vacation rentals, and casino hotels, among other things. To date, the business has collected around $4.5 billion in capital, with companies like Microsoft and SoftBank Group among its investors.

Financial Outlook of OYO

Agarwal informed staff via email a few weeks before the FIR that the startup was on course to record a 60% year-over-year (YoY) revenue growth in the fourth quarter (Q4) of the fiscal year 2024-25 (FY25) to INR 2,100 Cr. In the email, Agarwal stated that the effective merger of G6 Hospitality, which increased the company's revenue by INR 275 Cr, was a major factor in this performance. After a net loss of INR 1,286.5 Cr in the previous fiscal year, OYO recorded its first profitable year in FY24 with a net profit of INR 229 Cr. Revenue, however, decreased 1.3% from INR 5,463.9 Cr in FY23 to INR 5,388.78 Cr in the reviewed year.