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How a tax case that was related to Biryani Restaurant revealed a 'Rs.70,000 Crore Billing Scam' in the whole of India.

What might be one of the largest tax evasion rackets in the Indian restaurant industry has been pricked by a regular Income Tax department investigation in Hyderabad into financial anomalies in 3 well-known biryani chains—apparently under the headings of Pista House, Shah Ghouse, and Mehfil—which includes the name of the restaurant in question.

The probe was initiated on suspicions of unrecorded income and underreported revenues of these restaurants. In the process of search and data examination, the authorities observed tendencies of operational-level omission and modification of billing documentation, especially cash transactions.

The solution was found when the investigators found that most of those restaurants, such as these biryani stores, used a common pan-India software platform to store bills. This caused a huge data tidy-up: the government analyzed more than 60 terabytes (60 TB) of billing information linked to 1.77 lakh restaurant IDs around the country—amounting to about 10 percent of the restaurant billing software industry.

Using the innovative analytics and generative AI-based systems, the Hyderabad branch of the Income Tax Department triangulated transactions with the GST filings, external data, and public information. They found the evidence of post-billing deletions and suppression: restaurants registered all the sales and then purged the cash invoices selectively before submitting returns to avoid paying income tax and GST.

It was an astronomical number; the turnover in sales was stifled since the 2019-20 financial year alone billed at least 70,000 crore (and the deletions after billing were at 13,317 crore). More than 5,000-5,141 crore of this unidentified revenue was in Andhra Pradesh and Telangana. The overall billing information analyzed was 6 years of 2.43 lakh crore.

In most instances, the officials estimate that approximately 27% of the total sales were repressed. The investigation is currently going countrywide, and the ultimate tax amounts may be even more with penalties. This line of the biryani trail points to the visibility of AI-based forensics to uncover advanced evasion strategies in high-cash industries such as food services.

The case acts as a wake-up alarm to the restaurant business by making sure they are transparent with billing practices. The government is still under investigation, and further disclosures are likely to happen in the near future.