The Income Tax Department has detected suppression of sales worth around Rs 408 crore by restaurants following a nationwide verification exercise conducted across the food and beverage (F&B) sector.
The probe stems from an investigation launched in November 2025 to examine possible tax evasion patterns among restaurants. During the exercise, the department found that several establishments were allegedly deleting bulk bills and making other alterations in their billing systems to understate actual sales.
Officials analysed transactional data from about 1.77 lakh restaurants using artificial intelligence-enabled analytical tools and compared it with the turnover declared in their income tax returns. The analysis pointed to large-scale under-reporting of income across several cases.
According to the Central Board of Direct Taxes (CBDT), in some instances recorded sales were not fully reflected in financial accounts or tax filings, while certain transactions were excluded from reported sales altogether.
Based on these findings, the department conducted surveys on March 8 at 62 restaurants across 46 cities in 22 states. Preliminary findings from the exercise indicated suppression of sales amounting to approximately Rs 408 crore. Investigations are currently underway.
The department said it continues to promote voluntary compliance through a trust-based approach. As part of this effort, it has launched the “SAKSHAM NUDGE” campaign to guide taxpayers in correcting discrepancies in their filings.
In the first phase of the campaign, emails and messages will be sent to around 63,000 identified restaurants, advising them to update their returns by March 31, 2026, under Section 139(8A) of the Income Tax Act.