Under the lens. The I-T sleuths, after analysing around 60 terabytes of data of 1.77 lakh food joints through AI and data analytics forensic tools, found out that restaurants were indulging in massive under billing of sales in tax fillings. The transactions were done over seven years from 2019.
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JOTHI RAMALINGAM B
The Income Tax department on Sunday launched a nationwide survey at 60 to 70 locations to unravel a deeply entrenched software-based network that restaurants across States and Union Territories use for massive tax evasion. The Central Board of Direct Taxes (CBDT), under the Ministry of Finance, decided to go in for a crackdown across the country after a routine inspection at biryani restaurants in Hyderabad last month unravelled concealed sales, widely estimated to be around ₹70,000 crore.
Sources privy to the CBDT offensive stated that the survey began on Sunday morning across 60 to 70 locations, covering restaurants as well as common software data management company. At least four popular restaurants in the national capital were covered in the survey, including a leading foods joint on Pandara Road and another one known for offering North Indian curries. According to sources, there are six restaurant locations in Tamil Nadu, two in Kerala and four in Gujarat where the sleuths carried out surprise check of records and data to expose the racket.
Tax evasion
Sources said a comprehensive picture of tax evasion would appear after the survey gets over. The I-T sleuths, after analysing around 60 terabytes of data of 1.77 lakh food joints through AI and data analytics forensic tools, found out that restaurants were indulging in massive under billing of sales in tax fillings. The transactions were done over seven years from 2019.
Sources said one of the companies under inspection uses Petpuja — a point-of-sale (PoS) billing and restaurant management software used by a large number of eateries across the country. It manages orders, billing, inventory, GST records and payment tracking and stores data on central servers, allowing restaurants to manage bills digitally.
The IT officials were astonished to find out the common modus operandi: of manipulating the software, restaurants would initially record all sales and later delete them at the time of filling GST. The software had inbuilt features to allow mass deletion of data periodically within seconds. According to officials, it also enabled reducing the value on bills — another under-invoicing tactic to pay less taxes.
So far, the I-T department, in its initial round of digging of data at Hyderabad, found out that about₹13,317 crore worth under billing was identified, specifically from deleted invoices. According to a broad assessment, I-T officials suspect that more than 27 per cent of restaurants are indulging in such tax malpractices, making themselves richer at the expense of the government exchequer.
Published on March 8, 2026
