In Shorts
- IT probe into Hyderabad biryani outlets uncovers suspected Rs 70,000 crore tax evasion
- Officials analysed 60 TB of billing data across more than 1.7 lakh restaurant IDs
- Billing software allegedly used to delete or alter sales records before tax filing
A tax investigation that initially targeted a few popular biryani restaurant chains in Hyderabad has widened into what authorities believe could be a massive billing manipulation scam spanning India’s food service industry.
According to officials familiar with the matter, the Income Tax Department launched a probe last year after detecting financial discrepancies and unaccounted income linked to certain restaurant groups. The investigation led to searches across nearly 30 locations in November, including restaurant premises and residences associated with senior management.
During these operations, tax officers recovered extensive digital transaction data, including UPI payment trails routed through multiple accounts. Further analysis of these records hinted at a much larger pattern of possible financial irregularities across eateries nationwide.
Investigators reportedly examined around 60 terabytes of billing information sourced from a point of sale system used by over 1.7 lakh restaurant IDs across India. The findings suggested that a widely used billing software contained features such as bulk deletion of sales data and post generation invoice modification.
Authorities allege that these functions were misused by some establishments to selectively erase cash invoices or alter transaction records. In certain instances, entire blocks of sales data covering periods of up to 30 days were reportedly removed before filing GST returns, allowing businesses to underreport their turnover and reduce tax liabilities.
Preliminary estimates indicate that suppressed restaurant sales since the 2019 to 2020 financial year could amount to nearly Rs 70,000 crore. States such as Karnataka, Telangana and Tamil Nadu are believed to have recorded some of the highest levels of suspected evasion uncovered during the investigation.
Officials also conducted sample physical and digital verification across select restaurants in Andhra Pradesh and Telangana, where discrepancies worth approximately Rs 400 crore were identified between actual sales and reported billing data.
The ongoing probe is expected to expand further as authorities continue to examine billing platforms and transaction trails across the hospitality sector. Investigators believe the current findings may represent only a fraction of the potential scale of tax evasion in the industry.
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