EIH Hotels has been slapped with a significant GST penalty, highlighting compliance challenges in the hospitality sector's tax obligations. The company's Maidens Hotel, operated by EIH Limited, has been penalized ₹57.98 lakh by Delhi GST authorities for non-payment under the Reverse Charge Mechanism (RCM) on foreign travel agent commissions.

Penalty Details

The penalty was imposed by the Deputy Commissioner, Delhi, for alleged non-compliance with GST obligations over a period spanning from FY2019 to FY2023.

Nature of Non-Compliance

The penalty relates specifically to non-payment of GST under the Reverse Charge Mechanism on import of services. The issue centers around commissions paid to foreign travel agents, a common practice in the hospitality industry where hotels work with international booking platforms and travel agencies to attract overseas customers.

The Reverse Charge Mechanism requires the recipient of services to pay GST instead of the supplier, particularly relevant when dealing with foreign service providers who may not be registered under Indian GST laws.

Potential Company Response

While EIH Hotels has not yet disclosed its response strategy, companies in such situations typically consider:

• Filing an appeal against the order within the prescribed statutory time limit
• Reviewing and strengthening their compliance processes to prevent future issues

Impact and Implications

The financial impact appears to be limited to the penalty amount imposed. However, this development underscores the ongoing scrutiny of GST compliance in the hospitality sector, particularly regarding international transactions and service imports that fall under the Reverse Charge Mechanism.

This incident serves as a reminder for companies in the hospitality industry to carefully manage their tax obligations, especially when dealing with international partners and service providers.

EIH Hotels , the flagship company of The Oberoi Group, has announced the signing of a management agreement for a luxury resort at the iconic Makaibari Tea Estate in Darjeeling. The project represents a significant milestone in the Group's long-term strategy to curate exceptional hospitality experiences in extraordinary natural settings.

Historic Tea Estate Setting

Makaibari Tea Estate stands as one of the world's oldest and most storied tea estates, established in 1859. The estate is celebrated for its dramatic Himalayan vistas, lush primary forests and rare biodiversity across 1,236 acres (500 hectares). The property includes one of the world's oldest functioning tea factories, constructed entirely of wood, bamboo and cast iron, offering a rare view into living industrial heritage.

Recognised globally as the world's first fully certified organic tea estate in 1988, Makaibari has pioneered biodynamic and permaculture farming long before such practices became mainstream. The estate's longstanding commitment to sustainability extends beyond agriculture, establishing a model for community development including fair labour practices, livelihood enhancement and long-term support for worker families.

Resort Development Details

The Oberoi, Makaibari Tea Estate, Darjeeling will feature 25 keys and is scheduled to open in 2030. The resort is being designed by Nava Design Studios Co. Ltd., Bangkok, and developed in partnership with Luxmi Tea Co Private Limited. Located 35 kilometres from Bagdogra International Airport, the resort will preserve an atmosphere of seclusion amid the natural beauty of the eastern Himalayas.

The resort has been master-planned with the potential for additional keys in the future, allowing for thoughtful expansion in harmony with the landscape. The experience will be crafted to reflect the timeless character and extraordinary setting of Makaibari, rooted in heritage, tea culture and the region's breathtaking terrain.

Leadership Perspectives

Mr. Rudra Chatterjee, Managing Director of Luxmi Tea Co Private Limited, highlighted Makaibari as a living legacy shaped by nature, craftsmanship and community over 150 years. He emphasised the estate's pristine forests, panoramic Himalayan views and rare biodiversity as truly exceptional features. The hotel will play an important role in training and skilling local people, enabling long-term employment opportunities within The Oberoi Group, with every aspect of development prioritising sustainable practices to ensure the estate's existing flora and fauna remain fully protected.

Mr. Arjun Oberoi, Executive Chairman of The Oberoi Group, described the project as an inspiring addition to their development portfolio. He noted Makaibari's natural beauty, artisanal traditions and historical significance as making it an extraordinary setting for an Oberoi resort. The partnership reflects their commitment to creating transformational experiences in destinations where nature, culture and heritage come together in meaningful ways.

Mr. Vikram Oberoi, Chief Executive Officer of The Oberoi Group, emphasised their priority to honour the exceptional setting and contribute meaningfully to the communities that have long been its custodians. The company is committed to creating sustainable employment, advancing skill development and strengthening long-term community initiatives.

Expansion Strategy

This announcement comes as EIH Hotels continues to advance a robust expansion plan, with a development pipeline of 29 upcoming hotels and luxury cruisers scheduled to open by 2030. These projects across India and select international destinations will add approximately 2,251 keys to the portfolio. A significant proportion of these developments will be operated under management contracts, underscoring the strategic importance of this model in the company's long-term growth roadmap.

With The Oberoi, Makaibari Tea Estate, Darjeeling, EIH Hotels further strengthens its vision of shaping iconic destinations anchored in heritage, nature and an unwavering commitment to excellence.