The Quotation That Forgot Tolls and Tax
Rohan runs a small travel agency in Kolhapur. He sends a quotation of ₹1,42,000 for a 40-pax, two-night college study tour to Lonavala and Khandala, covering a 45-seater bus, budget hotel on twin sharing, breakfast and dinner, and two guides. The client, a junior college, accepts by email and pays ₹30,000. While preparing the confirmation voucher, Rohan realises the quotation omitted the bus tolls and parking of about ₹9,000 and the 5% GST on the hotel component of ₹3,200. He also under-quoted the guide by ₹1,500. His margin was ₹12,000; now it is near zero, and the bus operator has already been booked with a ₹10,000 advance. The college coordinator says the budget is fixed and cannot be increased. A competitor has offered a similar tour at ₹1,38,000.
1. What is Rohan's legal and commercial position now that the college has accepted the quotation, and what options are realistic?
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The college's email acceptance creates a contract on the quoted terms. Rohan cannot simply add ₹13,700 to the invoice unless the quotation expressly said 'taxes and tolls extra' or included a valid variation clause. He must first read the quotation wording: if it says 'all inclusive', he is bound; if it says 'GST extra' or 'tolls extra', he may invoice those amounts. The GST is a statutory cost, but that does not automatically let him change an inclusive price after acceptance.
His realistic options are: absorb the extra cost and protect the relationship; reduce scope with the college's written consent, such as one guide instead of two or a packed dinner instead of a buffet; renegotiate with the hotel and bus operator; or withdraw and face a claim. He should not silently cancel the bus or downgrade the hotel without consent, because that creates a bigger dispute. Commercial pressure from a competitor at ₹1,38,000 is not a legal defence, but it is a reason to preserve the client. The first step is to check the quote's exact words, because that determines whether this is a pricing mistake or a contractual obligation.
2. Recommend a course of action with numbers and explain the trade-off.
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On the stated figures, absorbing everything turns the ₹12,000 margin into a loss of about ₹1,700 (12,000 − 9,000 − 3,200 − 1,500). That is survivable for one group, but it must not become a habit. Rohan should keep the agreed price at ₹1,42,000, confirm the bus and hotel, and look for savings that do not damage safety or the core promise. For example, he can ask the hotel for a complimentary room for the bus driver, negotiate the guide fee, use one senior guide plus college faculty for coordination, and replace one buffet dinner with a fixed packed meal if the college agrees. He should not cut insurance, driver rest, or the quality of the hotel below what was promised.
The trade-off is short-term loss versus reputation and future bookings. Walking away or demanding more money after acceptance could cost him the advance, the bus deposit and the college's future tours. Absorbing the cost and then fixing the quotation process is the better commercial judgement. He should tell the college only what is necessary: the tour is confirmed at the agreed price, and one or two operational details may change with their consent. He should not use the competitor's price as a threat.
3. What should Rohan change internally before sending the next quotation?
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Rohan needs a written cost sheet, not a mental estimate. The sheet should list every cost line: bus hire, tolls, parking, driver allowance, fuel, hotel room and meal rates, guide fees, entry tickets, insurance, GST and a contingency of about 5%. He should mark whether each line is inclusive or extra and state the validity period of the quote. A second person should check the arithmetic before the quote is emailed. Supplier rates should be confirmed in writing, and the cancellation and payment terms should be printed on the quote.
The process change should also include a margin review: if the calculated margin falls below a set percentage, Rohan must either raise the price, reduce the scope in writing or decline the tour. He should keep a copy of the accepted quote and the client's acceptance email. For GST, he should decide whether to quote inclusive or exclusive and apply the same rule consistently. The mistake was not only a missing toll figure; it was the absence of a checklist that would have caught tolls, tax and guide cost before the price left the office.