Looks like 2019 hasn’t started on the right foot for hospitality unicorn OYO. After an ongoing tussle with hotels lobbies threatening a boycott, the company has now found itself in crosshairs of income tax (I-T) officials and has received notices for furnishing inaccurate data regarding their income.
A media report citing sources familiar with the matter said that the income tax department has sent notices to parent company Oravel Stays in November and December for the assessment year 2016-2017.
The case is speculated to be linked to non-deduction of tax deducted at source (TDS) on payments made by the company in the assessment year 2016-17.
It is to be noted that OYO reported losses worth $56.24 Mn (INR 400 Cr) in its returns for 2016-2017. It is to be noted that the I-T department in December passed an order against the company and OYO has filed an appeal against the order this week.
In an email reply to Inc42, an OYO spokesperson said, “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, at OYO, continue to engage proactively with the tax authorities on all concerns arising thereof.
“We have filed our audited financials of FY 2016 as per due process, that is available year on year with the Registrar for Companies. OYO’s revenues have grown over the years while the losses have continued to reduce. As a new age hospitality startup with high levels of integrity, transparency, and corporate governance standards, we are committed to reconciling all outstanding issues and clarifying all concerns raised by competent authorities,” the spokesperson added.
The startup became a unicorn in 2018 at a valuation of $5 Bn (INR 35,255 Cr) after raising funding of $800Mn (INR 5,640 Cr) funding from SoftBank, $100 Mn (INR 705 Cr) from Grab and another $100 Mn (INR 705 Cr) commitment from a group of investors.
It also announced its first Employee Stock Ownership Plan (ESOP) for 250 employees in a secondary share acquisition programme worth $5.7 Mn – $7.1 Mn (INR 40Cr-50 Cr).
FHRAI and now income tax notices, OYO has its plate full with controversies for the last quarter of FY18.
[The development was reported by ET.]