Probe into Hyderabad Biryani Joints Uncovers Rs. 70,000 Crore Income Tax Evasion Across India

An investigation initiated in Hyderabad has snowballed into one of the largest alleged tax evasion detections in the country’s food and beverages sector, with the Income Tax Department uncovering suppressed turnover estimated at nearly Rs. 70,000 crore since FY 2019–20.

The probe, led by the investigation wing of the Income Tax Department, began with scrutiny of select biryani restaurant chains in Hyderabad. However, a deeper data dive into a widely used pan-India billing software revealed a far larger pattern of alleged sales suppression spanning multiple states.

60 Terabytes of Data Analysed

Officials analysed approximately 60 terabytes of transactional data extracted from a billing software platform that reportedly controls nearly 10% of India’s restaurant billing market. The software is used by over 1.7 lakh restaurant IDs nationwide.

According to officials, forensic examination of the data indicated that restaurants had collectively suppressed sales turnover worth around ₹70,000 crore over the past five financial years.

AI and Big Data Tools Deployed

Investigators employed advanced data analytics tools, including Artificial Intelligence (AI) and Generative AI, to scan and correlate massive datasets. The analysis identified approximately ₹13,317 crore in “post-billing deletions” — a practice where invoices are allegedly deleted after generation to reduce reported revenue.

Officials noted that such deletions are only one among several methods of alleged suppression. Other suspected techniques include selective deletion of cash invoices and wiping transaction records clean for specific date ranges.

State-Wise Impact

Preliminary findings suggest that the alleged suppression is not limited to one region. Among the states flagged:

Karnataka is estimated to account for nearly ₹2,000 crore in suppressed turnover.
Telangana follows with approximately ₹1,500 crore.
Tamil Nadu accounts for nearly ₹1,200 crore.

Authorities indicated that up to 27% of sales may have been concealed in certain cases.

Industry-Wide Ramifications

The findings suggest systemic manipulation within segments of the restaurant industry, particularly among establishments heavily reliant on digital billing systems. Officials are currently working to quantify the exact tax liability, including penalties and interest, arising from the suppressed income.

Given the scale of the alleged evasion, the case is expected to trigger nationwide scrutiny of billing software providers and restaurant chains. The department may also examine whether software-level vulnerabilities or deliberate configurations enabled invoice deletion and revenue masking.