Hyderabad Biryani Audit Uncovers Massive Rs 70,000 Crore Tax Evasion Scheme
Income tax investigators reveal one of India’s largest suspected tax evasion rackets linked to restaurant billing software.
A routine inspection of biryani restaurants in Hyderabad has uncovered a suspected tax evasion racket estimated at nearly Rs 70,000 crore, officials said, marking one of the largest financial compliance probes in the country. The investigation, initially a local audit, has now expanded into a nationwide inquiry involving thousands of eateries across multiple states.
Income Tax Department officers began the probe after noticing discrepancies between reported revenues and actual customer footfall in popular Hyderabad restaurants. Preliminary surveys revealed significant gaps in turnover declared in tax filings, prompting a detailed forensic analysis of restaurant billing practices.
Investigators identified a widely used restaurant billing software, servicing over 1.5 lakh outlets nationwide, as a key link in the evasion scheme. Analysis of backend records spanning six financial years—nearly 60 terabytes of data—showed systematic deletion or alteration of bills after payments, effectively concealing substantial sales before filing tax returns.
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Preliminary estimates indicate that at least Rs 70,000 crore in sales may have been hidden since 2019–20. Of this, Rs 13,000 crore worth of deleted invoices has been reconstructed digitally, while the rest reflects suppressed income inferred from transaction patterns and cross-verification with external data sources. Ground verification in Telangana and Andhra Pradesh confirmed hundreds of crores in unreported sales.
The irregularities are not limited to biryani restaurants or Hyderabad. Investigators found similar under-reporting and billing manipulations in eateries across several states, suggesting the issue may extend across India’s food and hospitality sector. Officials believe the current findings may only represent a fraction of the total evasion, as other digital billing platforms have yet to be audited.
The case highlights vulnerabilities in digital billing systems and demonstrates the power of data analytics and AI in modern tax enforcement. Authorities plan to issue further notices, recover unpaid taxes with penalties, and pursue legal action where necessary. The revelations are expected to prompt tighter scrutiny of digital accounting practices and regulatory oversight across India’s restaurant industry.
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