Massive Tax Evasion Uncovered in Indian Biryani Chains

Feb 19, 2026

77 min

Feb 19, 2026 09:32

Biryani trail exposes Rs700 billion restaurant tax scam in India

## Nationwide Tax Evasion Probe

An investigation by India's Income Tax department has revealed a significant tax evasion scheme involving popular biryani restaurant chains. Initially focused on Hyderabad, the probe has expanded nationwide, uncovering suspected sales suppression amounting to Rs 700 billion since the 2019–20 financial year.

## Advanced Analytics in Action

The investigation utilized forensic data analytics and AI tools to analyze extensive billing records from a software platform used by over 100,000 restaurants. This platform, which manages about 10% of India's restaurant billing, provided access to data from 177,000 restaurant IDs.

## Widespread Sales Suppression

The analysis covered transactions from six financial years, revealing that eateries suppressed sales turnover by at least Rs 700 billion. In Andhra Pradesh and Telangana alone, sales suppression reached Rs 51 billion, with detailed inquiries in 40 restaurants detecting Rs 4 billion in unreported sales.

## Top States for Evasion

The states with the highest detected evasion include Karnataka, Telangana, Tamil Nadu, Maharashtra, and Gujarat. Karnataka led with Rs 20 billion in deletions, followed by Telangana and Tamil Nadu.

## Modus Operandi

Restaurants reportedly entered all sales into the software to prevent internal fraud but selectively deleted cash invoices to reduce tax liabilities. Some establishments deleted entire billing records for specific periods, filing returns that showed only a fraction of actual sales.

## Ongoing Investigation

The Central Board of Direct Taxes has expanded the investigation, suggesting that the current findings might only be a fraction of the total evasion, as multiple billing platforms are in use across the sector.

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