New Delhi/Hyderabad. Suspecting tax evasion of approximately ₹70,000 crore in the country’s restaurant sector, the Income Tax Department has launched a search operation at several major restaurants and food chains. According to officials, the action stemmed from an investigation into a Hyderabad-based biryani restaurant chain, where suspicions of concealing sales figures surfaced.
How did the case come to light?
The investigation began with a routine inspection of some restaurants in Hyderabad. Officials noticed a significant discrepancy between customer numbers and declared sales figures. A deeper investigation later revealed that some restaurants were allegedly concealing actual sales through billing software.
Why nationwide action?
Preliminary investigations revealed that the billing software being used is used in thousands of restaurants across the country. For this reason, the Income Tax Department launched simultaneous operations in several states, conducting surveys and searches at the offices and establishments of major restaurant chains.
How was the alleged tax evasion carried out?
According to investigating agencies, some restaurants recorded all transactions in the billing system, but later deleted cash bills or certain sales records. This undermined actual turnover and reduced tax liability. In several cases, even entire billing dates were removed.
What did the data investigation reveal?
The Income Tax Department examined approximately 60 terabytes of transaction data spanning six financial years. Analysis of records related to millions of restaurant IDs revealed evidence of widespread sales concealment. The investigation suggests that turnover of up to ₹70,000 crore has been suppressed.
Restaurant Industry in turmoil
This nationwide crackdown has created a stir in the restaurant industry. Officials say the investigation is thoroughly examining POS machines, billing data, server logs, and financial records. If the allegations are proven true, this could become the largest case of tax evasion in India’s restaurant sector.
