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An Indian hotel paying commission to foreign OTAs such as Booking.com, Agoda, and Expedia must self-discharge GST under reverse charge per Section 9(3) of the CGST Act 2017 and Notification 10/2017-Integrated Tax (Rate). Each settlement carries an OTA commission line in foreign currency, an INR equivalent that must be self-invoiced, an 18 percent IGST liability paid in cash, a GSTR-3B Table 3.1(d) entry, and an ITC claim in the next period — all of which must reconcile back to the OTA's commission invoice and the bank settlement. Manual reconciliation across the OTA invoice, the bank statement, the self-invoice register, and the GSTR-3B filing rarely produces the typed evidence statutory auditors expect.
Ingest the foreign OTA commission invoice, the bank settlement record, the self-invoice register, and the GSTR-3B Table 3.1(d) line. Apply the GST self-invoice exchange rate to convert foreign-currency commission to INR. Compute 18 percent IGST on the INR value. Match the IGST cash payment against the electronic cash ledger debit. Tag the next-period ITC claim under Section 16. Decompose the OTA settlement variance into OTA_COMMISSION_GROSS, RCM_IGST, TDS_NON_RESIDENT (where applicable), and FOREX_VARIANCE codes so each line is traceable to its statutory source.
GST RCM applicability flag at vendor master level (foreign OTA = yes), self-invoice numbering series, exchange-rate source and rate-date convention (typically the relevant Section 14 of the Customs Act / Rule 34 GST notification), GSTR-3B Table 3.1(d) mapping, and a next-period ITC release rule that posts the ITC line in the month following RCM payment.
A reconciled view that shows each foreign OTA commission line with its INR self-invoice value, its 18 percent IGST cash payment, the matching electronic cash ledger debit, the GSTR-3B Table 3.1(d) entry, the next-period ITC claim, and the forex variance against the bank settlement — all classified into typed codes and ready for statutory audit.
A 150-room business hotel in Mumbai that takes 35 percent of its bookings through Booking.com, Agoda, and Expedia faces a tax challenge that domestic OTA reconciliation does not raise. The foreign OTA charges commission in EUR, USD, or SGD, has no Indian GSTIN, and does not deduct GST on its own invoice. Under Section 9(3) of the CGST Act 2017, read with Notification 10/2017-Integrated Tax (Rate), the GST liability flips to the Indian hotel as the recipient of the imported service. The hotel must self-invoice 18 percent IGST on the commission, pay it via the electronic cash ledger, report it under GSTR-3B Table 3.1(d), and claim the ITC in the next return period under Section 16. None of this changes under the new Income Tax Act 2025 — that statute reshaped income-tax TDS, but GST law on import of services is untouched.
Why Reverse Charge Applies
Section 2(11) of the IGST Act defines import of services as a supply where the supplier is located outside India, the recipient is in India, and the place of supply is in India. Commission charged by a foreign OTA on a booking for an Indian hotel meets all three tests. The supplier — Booking.com BV in Amsterdam, Agoda Pte Ltd in Singapore, Expedia in the United States — sits outside India. The recipient is the Indian hotel. The place of supply for an intermediary service tied to immovable property in India is India.
Section 9(3) of the CGST Act, mirrored in Section 5(3) of the IGST Act, allows the government to notify categories of supply on which the recipient pays the tax. Notification 10/2017-Integrated Tax (Rate) is the operative notification: it lists “any service supplied by any person who is located in a non-taxable territory” to a registered person in India as a reverse-charge supply. A foreign OTA’s commission falls squarely within this notification.
The legal effect is that the foreign OTA does not collect GST. The Indian hotel computes IGST at 18 percent on the INR equivalent of the commission, pays it under reverse charge, and books an equivalent input tax credit in the next return period.
The Self-Invoice and the Cash Payment
Two procedural requirements often trip up hotel finance teams the first few quarters they handle foreign OTAs.
First, Section 31(3)(f) of the CGST Act requires the recipient to issue a self-invoice for any supply received from an unregistered supplier where reverse charge applies. The self-invoice must carry a unique serial number, the foreign OTA’s name and address, the commission description, the INR value, and the IGST computed at 18 percent. The INR value uses the exchange rate prescribed under the relevant GST rate notification — typically the rate on the date the supplier issues the invoice or the date the liability is recorded in books, whichever is earlier.
Second, Section 49(4) read with Rule 86B mandates that the IGST under reverse charge be paid through the electronic cash ledger. ITC sitting in the credit ledger cannot be used to discharge an RCM liability, even if the credit balance is large. The cash payment is what creates the next-period ITC entry. This is the single most common reconciliation break: the GSTR-3B Table 3.1(d) line shows the RCM liability, but the corresponding cash-ledger debit is missing or mistimed because the team attempted an ITC offset.
GSTR-3B Reporting and the ITC Claim
The RCM amount and the IGST paid go into Table 3.1(d) of GSTR-3B (inward supplies liable to reverse charge) for the month in which the liability arises. The same value is also reported in Table 4(A)(3) as an eligible ITC claim — but, critically, the ITC is taken in the return period in which the conditions of Section 16(2) are satisfied. Those conditions include possession of the self-invoice, receipt of the service, and payment of tax to the government. In practice, hotels claim the ITC in the same GSTR-3B in which the RCM is paid, provided all conditions are met by the filing date.
The annual return GSTR-9 reconciles the RCM disclosure across all months, and any short payment or short claim across the year is corrected via DRC-03 if the correction window has lapsed.
Reconciliation Against the Foreign OTA Commission Invoice
The reconciliation has four moving parts.
| Source | What it shows | Typical mismatch |
|---|---|---|
| Foreign OTA commission invoice | Commission in foreign currency, no GST | Forex rate differs from self-invoice rate |
| Bank settlement record | Net INR credit (gross booking minus commission) | Commission embedded; forex rate is OTA’s |
| Self-invoice register | INR commission, 18 percent IGST | Series gap, missing self-invoice |
| GSTR-3B Table 3.1(d) | RCM liability and ITC claim | Cash ledger debit not matched, ITC mistimed |
A hotel that books, say, EUR 4,200 of Booking.com commission in a month at a self-invoice rate of INR 92.50 per EUR records INR 3,88,500 of commission and INR 69,930 of IGST under RCM. The bank statement, however, may carry a slightly different INR figure because Booking.com applies its own conversion when netting commission from settlement. That gap is FOREX_VARIANCE — it does not change the GST liability (the self-invoice INR value drives IGST), but it must be classified so the books, the GSTR-3B entry, and the bank record all reconcile.
A structured GST reconciliation software approach treats RCM_IGST, OTA_COMMISSION_GROSS, FOREX_VARIANCE, and TDS_NON_RESIDENT as distinct typed variance codes, so every line in the OTA settlement is traceable to its statutory source. This typed decomposition is also what a statutory auditor under CARO 2020 expects to see when testing the foreign OTA settlements bridge.
Cross-Tax Companion: TDS on the Same Commission
The same commission line that triggers GST RCM also typically triggers income-tax TDS under Section 413 of the new Income Tax Act 2025 — the successor provision to legacy Section 195 — at the rate prescribed under the Act or the relevant DTAA, whichever is more beneficial. The two taxes are independent: RCM is indirect, paid in cash, recoverable as ITC; TDS is direct, withheld from the payment, deposited against the OTA’s overseas tax position. The reconciliation must classify both. See the companion guide on TDS Section 413 on hotel foreign OTA payments for the income-tax side.
The pillar hotel reconciliation in India covers the full payment-mix taxonomy that wraps around foreign OTA commission, and the Booking.com hotel settlement reconciliation guide covers the settlement schema in detail. Notification text and the GSTR-3B return schema are published on the GST Portal (gst.gov.in).
What Structured Reconciliation Changes
For an OTA-heavy hotel running 50 to 200 foreign OTA bookings a month, the difference between a manual and a structured reconciliation is the difference between an audit qualification and a clean opinion. Structured matching ingests the foreign OTA commission invoice, computes the self-invoice INR value at the GST-prescribed rate, posts the 18 percent IGST RCM line, links the cash-ledger debit, and releases the next-period ITC entry — all with typed evidence that ties back to the GSTR-3B filing. Hotels using a purpose-built reconciliation software India platform compress what is otherwise a quarter-end scramble of self-invoice generation and Table 3.1(d) cleanup into a monthly cadence the finance team and the auditor both trust.
For the broader hotel industry reconciliation surface, see the Hotels & Hospitality industry guide.