A routine inspection of biryani restaurants in Hyderabad has unexpectedly exposed what officials now describe as one of the largest suspected tax evasion rackets in the country, with concealed sales estimated at nearly Rs 70,000 crore. What began as a local compliance check has expanded into a nationwide investigation spanning thousands of eateries and multiple states.
The probe was initiated after officers of the Income Tax Department noticed inconsistencies in the reported revenues of several popular biryani outlets in Hyderabad. Initial surveys revealed significant gaps between actual customer footfall and the turnover declared in tax filings. These discrepancies prompted a deeper forensic examination of billing practices used by the restaurants, reports said.
Investigators soon identified a commonly used restaurant billing software as a key link. The platform, which services over one and a half lakh restaurants across India, was found to allow post-transaction manipulation of billing data. Tax officials accessed backend records and began analysing nearly 60 terabytes of data covering six financial years. The exercise revealed a systematic pattern of deleting or altering bills after payments were received, effectively erasing large volumes of sales from official records before tax returns were filed.
According to preliminary estimates, at least Rs 70,000 crore in sales may have been deliberately concealed since the 2019–20 financial year. Of this, around Rs 13,000 crore worth of deleted invoices has already been clearly identified through digital reconstruction, while the remaining amount reflects suppressed income inferred from transaction patterns and cross-verification with external data sources. Even limited ground verification of a small number of restaurants in Telangana and Andhra Pradesh uncovered hundreds of crores of unreported sales, reinforcing the scale of the problem.
Although the investigation initially focused on biryani restaurants, authorities say the issue is not confined to a single cuisine or city. As the probe widened, similar billing irregularities were detected in restaurants across several states, particularly in southern India. In some cases, billing data was not deleted but tax returns were filed with significantly lower figures, suggesting deliberate under-reporting rather than technical error.
Officials involved in the investigation have indicated that the current findings may represent only a fraction of the total evasion, as the analysis so far has centred on just one billing software provider. Several other digital billing systems used in the hospitality sector are yet to be examined, raising concerns that the practice could be far more widespread.
The case has underscored how vulnerabilities in digital billing infrastructure can be exploited on a large scale, while also demonstrating how data analytics and artificial intelligence are reshaping tax enforcement. By correlating massive datasets of billing records, payment trails and financial disclosures, authorities were able to uncover patterns that traditional audits may have missed.
As the investigation continues, tax officials are expected to issue further notices, recover unpaid dues along with penalties, and initiate prosecution where warranted. The revelations are likely to trigger closer scrutiny of billing practices and could lead to tighter regulatory oversight of digital accounting systems used by India’s food and hospitality industry.