Tax probe flags alleged $7.7bn sales suppression by India-based restaurants

A caller in-depth probe has pointed to an alleged taxation evasion successful India’s edifice industry, with respective well-known biryani and eating chains nether scrutiny.

According to a study connected The Times of India, investigation of billing records suggests that eateries whitethorn person concealed income of Rs700bn ($7.7bn), crossed aggregate fiscal years opening successful 2019–2020.

The investigation, led by the Hyderabad probe portion of the Income Tax Department, utilized forensic information analytics and AI tools to analyse ample volumes of billing records from restaurants crossed the country.

The study said that the investigators examined 60 terabytes of transaction information from a billing bundle level utilized by much than 100,000 restaurants.

The platform, which accounts for astir 10% of India’s edifice billing market, gave entree to records tied to astir 177,000 edifice IDs.

From this dataset, investigators identified suppressed turnover worthy astatine slightest $7.7bn since 2019–2020. The section has not yet finalised the taxation request oregon penalties connected the concealed income.

Data from the bundle supplier showed that restaurants crossed India carried retired post-billing deletions totalling Rs133.7bn.

The highest levels of deletion enactment were observed successful the Indian states of Gujarat, Karnataka, Maharashtra, Telangana, and Tamil Nadu.

Officials noted that successful immoderate cases, restaurants did not delete entries from the bundle but inactive allegedly under-reported revenues successful income taxation returns.

Restaurants typically grounds card, UPI [Unified Payments Interface] and currency transactions successful the billing strategy to forestall interior pilferage by employees.

Documents cited by The Times of India described 1 recurring signifier arsenic “the selective deletion of currency invoices, wherever restaurants allegedly retained lone a information of currency entries and deleted the remainder to trim income taxation and GST [goods and services tax] exposure”.

Investigators besides identified a “bulk deletion” method, successful which bills were erased for selected day ranges—sometimes covering up to 30 days—before taxation returns were filed, showing lone a information of the existent sales.

Overall, the database reviewed covered Rs2,430bn of billing crossed six fiscal years from 2019–2020 to 2025–2026.

High-capacity systems and AI tools, including generative AI, were utilized to analyse the transactions and to representation GST numbers to idiosyncratic restaurants utilizing open-source and publically disposable information.

Following the archetypal findings, the Central Board of Direct Taxes has decided to widen the probe to a broader acceptable of restaurants crossed India.