EaseMyTrip Hit with ₹17 Lakh GST Penalty Notice

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EaseMyTrip, a leading online travel platform, has been issued a penalty notice of ₹17.35 lakh by the Sales Tax Officer in Delhi for alleged violations under the Goods and Services Tax (GST) laws. The penalty relates to an ineligible input tax credit claimed during the 2020-21 financial year, causing discrepancies in its GST filings. The penalty notice has been levied under the Delhi Goods and Services Tax Act, the Central Goods and Services Tax Act, and the Integrated Goods and Services Tax Act.

Despite the penalty notice , EaseMyTrip has assured that it will not have a material impact on its operations or financial health. The company plans to appeal against the order before the appropriate authorities, arguing compliance with tax regulations. This development comes at a crucial time when the company is expanding its operations, including securing an intercity electric bus project in Madhya Pradesh and launching a subsidiary in Brazil.

EaseMyTrip recently faced a decline in profit after tax by 26% in the third quarter of FY25, accompanied by a 6% revenue drop. Additionally, its co-founder and former CEO, Nishant Pitti, stepped down from his position in January after reducing his stake in the company. Despite these challenges, EaseMyTrip has continued its expansion and recently raised ₹234.03 crore through a preferential share allotment.

1. About EaseMyTrip

1.1 Working Model

EaseMyTrip operates as an online travel agency (OTA), offering ticket booking services for flights, hotels, buses, trains, and holiday packages. Unlike many competitors, the platform follows a “no convenience fee” model, which has been a key factor in attracting a loyal customer base. The company generates revenue primarily through commissions from airlines, hotels, and other service providers.

1.2 Revenue Model

EaseMyTrip earns from service fees, commissions, and advertising revenues. It also partners with banks and financial institutions to offer travel-related financial services, including EMI options and travel insurance. With a strong focus on cost efficiency, the company maintains high profit margins despite intense market competition.

1.3 Funding Background

Founded in 2008, EaseMyTrip bootstrapped its way to success without external venture capital for over a decade. The company went public in March 2021, raising approximately ₹600 crore in its initial public offering (IPO). Since then, it has seen consistent investor interest and is listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).

1.4 Founders and Leadership

EaseMyTrip was co-founded by brothers Nishant Pitti, Rikant Pitti, and Prashant Pitti. Their vision was to build a cost-effective, user-friendly platform that could provide travel solutions without hidden fees. Nishant Pitti, who served as the CEO, resigned in January 2025 after selling a portion of his stake in the company.

1.5 Services and Products

The platform offers airline ticket bookings, hotel reservations, bus and train bookings, holiday packages, visa assistance, and corporate travel management solutions. It has expanded internationally, catering to travelers in regions such as the UAE, UK, and the US.

2. Details of the GST Penalty

2.1 Alleged Tax Violation

EaseMyTrip received a penalty notice from the Sales Tax Officer in Delhi, citing discrepancies in its GST filings for FY 2020-21. The company reportedly availed an ineligible input tax credit, leading to a mismatch between its GSTR-3B and GSTR-9 returns.

2.2 Legal Implications

The penalty was imposed under three tax legislations:

1. Delhi Goods and Services Tax Act, 2017
2. Central Goods and Services Tax Act, 2017
3. Integrated Goods and Services Tax Act, 2017

These laws govern tax compliance for businesses operating in multiple Indian states. EaseMyTrip plans to contest the penalty before the appellate authorities, arguing that its tax filings comply with GST regulations.

3. Business Expansion Amidst Challenges

3.1 Intercity Electric Bus Project

EaseMyTrip recently won a government contract through its subsidiaries YoloBus and Easy Green Mobility to operate intercity electric buses in Madhya Pradesh. It plans to deploy 500 buses in 2025 and expand to 1,000 by 2026.

3.2 International Growth

In February 2025, EaseMyTrip launched a new subsidiary in Brazil, Easy Trip Planners Do Brasil Ltda, marking its entry into the South American market.

4. Financial Performance and Market Position

4.1 Profit Decline in Q3 FY25

EaseMyTrip reported a 26% year-on-year drop in profit after tax to ₹34.02 crore in Q3 FY25, compared to ₹45.68 crore in the same period last year. Revenue also declined by 6% to ₹150.56 crore.

4.2 Leadership Changes

Following Nishant Pitti’s resignation as CEO, EaseMyTrip has undergone restructuring in its senior management. The company has also raised ₹234.03 crore through a preferential equity share offering to support future growth.

5. Learning for Startups and Entrepreneurs

5.1 Importance of Tax Compliance

Tax regulations can significantly impact business operations. Startups must ensure compliance to avoid penalties and legal complications.

5.2 Diversification Strategy

Despite financial challenges, EaseMyTrip has focused on business expansion to maintain growth momentum. Entrepreneurs should explore new markets to stay competitive.

5.3 Customer-Centric Approach

EaseMyTrip’s success is largely due to its “no convenience fee” policy, proving that prioritizing customer experience can drive long-term brand loyalty.

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