New Delhi: What began as a routine inspection of biryani restaurants in Hyderabad has led to the discovery of one of the largest tax evasion schemes in the Indian food and beverage sector, with authorities estimating undisclosed sales worth nearly Rs 70,000 crore over recent years, reported Hindustan Times.
Officials found that hundreds of eateries across the country were systematically manipulating their billing records to underreport income and evade tax liabilities. Investigators uncovered widespread tampering with a widely-used restaurant billing software, resulting in the deletion or alteration of bills after customers had already paid.
Data Analysis Uncovers Hidden Sales
The probe involved a detailed examination of around 60 terabytes of billing data from nearly 1.77 lakh restaurant outlets nationwide. By using computerized analysis and artificial intelligence, authorities detected anomalies showing that many restaurants were reporting far lower sales figures than actual receipts.
Across India, this manipulation is believed to have erased bill records worth over Rs 13,000 crore. In Andhra Pradesh and Telangana alone, officials discovered more than Rs 5,100 crore in hidden sales. Spot checks at 40 establishments — comparing digital records with real turnover — revealed discrepancies of nearly Rs 400 crore.
Investigators now suspect that roughly one-quarter of all restaurant sales may have been underreported to tax authorities.
How the Scheme Worked
The billing software under scrutiny is used by more than one lakh restaurants across India. While its intended purpose is to log all payments — including cash, card and UPI — inspectors found that many restaurant owners were exploiting functions within the system.
Commonly, cash bills were deleted after the transactions were completed, since such payments are harder to trace. In other cases, entire days’ or even months’ worth of bills were wiped before tax filings were submitted, resulting in deliberately low declared incomes.
The database under review covered approximately Rs 2.43 lakh crore in restaurant sales over six years, providing a large dataset for AI tools to cross-reference records with GST registration data and public business listings.
Investigation Expands Nationwide
The initial investigation began with eateries in Hyderabad, Visakhapatnam and nearby towns. Once anomalies were identified, authorities widened the probe to include restaurants across the country.
Officials caution that this may be just the start — similar billing systems used by other restaurants and food chains might harbor additional undisclosed revenue, suggesting the scope of tax evasion could be even broader.
