Restaurant Probe Uncovers ₹70,000 Cr Tax Evasion

What began as a routine inspection of biryani restaurants in Hyderabad has reportedly uncovered a large-scale tax evasion network spanning multiple states.

According to officials cited in media reports, investigators found evidence suggesting that restaurants across India may have concealed nearly ₹70,000 crore in taxable income over the past few years.

How the Probe Began

The investigation reportedly started in Hyderabad, Visakhapatnam and nearby areas, where authorities examined billing practices at select restaurants.

During scrutiny, officials analysed data from a widely used restaurant billing software system. The platform is said to be used by more than one lakh food establishments across the country.

Using digital tools and artificial intelligence, authorities reviewed billing records from around 1.77 lakh restaurants and examined nearly 60 terabytes of data.

What Officials Found

Investigators reportedly discovered that in many cases, bills generated after customer payments were allegedly deleted or altered within the system.

Across India, restaurants using the software are said to have erased bills worth over ₹13,000 crore. In Andhra Pradesh and Telangana alone, hidden sales reportedly exceeded ₹5,100 crore.

To verify findings, officials conducted physical inspections at 40 restaurants. Comparing actual sales with digital records allegedly revealed nearly ₹400 crore in unreported transactions.

Based on the data examined so far, authorities believe that roughly one-fourth of restaurant sales may have been concealed.

Alleged Methods Used

According to investigators, one common method involved deleting cash transaction bills, which are harder to trace compared to digital payments.

In some instances, entire days or even months of billing records were allegedly wiped before tax returns were filed. In other cases, businesses are said to have declared lower earnings than actual collections without deleting records.

The data analysed reportedly covered restaurant sales amounting to ₹2.43 lakh crore over six years. Officials used AI-based tools to cross-check billing data with GST numbers and other publicly available records.

States Under Focus

Preliminary findings reportedly indicate higher levels of suspected evasion in Karnataka, Telangana and Tamil Nadu.

Officials have stated that the probe has now expanded beyond the initial regions after the scale of the suspected discrepancies became clear.

Investigation Continues

Authorities believe that the current findings may represent only part of the picture, as several other billing software systems are used by restaurants nationwide.

The investigation is ongoing, and further details are expected as officials continue to examine financial records and compliance patterns.