Ahead of Budget 2017, service tax blow for online travel players

Domestic aggregators say move will make them uncompetitive vis-a-vis international operators

Domestic hotel and tour aggregators such as OYO Rooms, EaseMyTrip and MakeMyTrip were expecting tax relief in the Budget to be presented on February 1. But the mood has turned sombre, with the finance ministry deciding to impose service tax on what they receive from customers and not just the commission earned from hotels and others. 

In a quiet move, the Central Board of Excise and Customs has amended the service tax rules to clarify this because there was ambiguity on the point. The changed rules came into effect on January 22. 

The aggregators said their associations had taken up