In a staggering revelation that has sent shockwaves through the Indian hospitality industry, the Income Tax Department has uncovered a colossal tax evasion racket involving the manipulation of billing software by restaurants across the country. At the heart of this financial heist is a dish synonymous with celebration and comfort: Biryani.
What began as a routine investigation into a Hyderabad-based biryani chain has snowballed into the country’s largest detection of suppressed sales, with officials estimating that restaurants concealed a mind-boggling ₹70,000 crore in revenue over the last six financial years .
The Digital Trap: AI vs. Deleted Bills
The investigation, spearheaded by the IT Department’s Hyderabad unit, took a high-tech turn when officials decided to dig deeper than physical account books. They gained access to the central servers of an Ahmedabad-based billing software company, whose platform is used by approximately 1.77 lakh restaurants nationwide—giving it a significant 10% market share in the food and beverage sector .
Facing a mountain of 60 terabytes of transactional data, the department deployed advanced Artificial Intelligence (AI) tools, including generative AI, to trace the digital footprint of every sale. The findings were alarming. From the financial year 2019-20 to 2025-26, the AI analysis of total billing worth ₹2.43 lakh crore revealed a systematic pattern of fraud .
The primary method of tax evasion was shockingly simple yet大规模. Restaurant owners were found to be deleting a portion of their cash sales from the system before filing their Goods and Services Tax (GST) returns. Since cash transactions are harder to trace than digital payments, this was the preferred method of choice. In some instances, entire billing data for specific days—sometimes up to 30 days—was wiped clean to show drastically reduced income.
Officials confirmed that out of the total suppressed sales, entries worth a staggering ₹13,317 crore were deleted post-bill generation .
State-Wise Breakthroughs: South India Under the Scanner
While the initial surveys were conducted in Hyderabad, Visakhapatnam, and surrounding regions, the data analysis painted a pan-India picture of fraud. Karnataka emerged as the hotspot for the highest evasion, with approximately ₹2,000 crore in deleted billing records. It was closely followed by Telangana (₹1,500 crore) and Tamil Nadu (₹1,200 crore) . Other major states like Maharashtra and Gujarat also showed significant irregularities.
To ground-truth the digital evidence, the department conducted physical surveys on a sample of 40 restaurants in Andhra Pradesh and Telangana. This exercise alone confirmed the suppression of sales worth nearly ₹400 crore, leading officials to estimate that roughly 27% of total sales were being hidden from the taxman .
"Just the Tip of the Iceberg"
The meticulous operation, conducted at the Digital Forensics and Analytics Lab in Hyderabad, involved mapping GST numbers with online public records to ensure no stone was left unturned . Investigators noted that while the software was designed to prevent staff-level fraud by recording all payments (card, UPI, and cash), it was the owners who misused the system at an administrative level.
The Central Board of Direct Taxes (CBDT) has now expanded the investigation nationwide, warning that this massive haul is likely "just the tip of the iceberg." With numerous other billing platforms operating in the sector, the food and beverage industry remains on high alert as the tax net tightens .
As the department begins the arduous task of calculating the exact tax and penalties on the suppressed income, one thing is clear: the aroma of biryani has led the Income Tax Department to the "mother of all GST scams," proving that in the digital age, no deleted file remains truly deleted .
