Biryani Chains-Linked Tax Case Leads To Alleged 70,000 Crore Billing Scam

Three popular Hyderabad-based biryani chains that were the focus of a tax fraud inquiry could now lead authorities to widespread manipulation of restaurant billing systems and massive amounts of undeclared revenue, potentially Rs 70,000 crore, across the food industry.

Sources told NDTV the investigation, led by the Income Tax Department's city unit, initially focused on suspected financial irregularities and unaccounted revenue at these restaurants.

These suspicions led to raids at 30 locations - from restaurant premises to the residences of the three brands' senior management - in November last year.

Sources said analysis of digital records, including UPI transactions routed through multiple accounts, recovered from those raids pointed tax officials to a potentially massive scam.

Specifically, officials analysed an estimated 60 TB, or terabytes, of billing data from a POS, or point of sale, system that covers over 1.7 lakh restaurant IDs across the country.

The data expanded the probe to a pan-India operation in which a certain billing software used by 'thousands of eateries' was found to feature a 'bulk delete' function that erases entire blocks of sales records, in some cases up to 30 days, leaving little trace of the deleted transactions.

This feature, with other functions like deletion of individual bills and post-generation modification, were misused to suppress sales figures, tax officials alleged.

Officials claimed they found signs of systematic deletion and alteration of billing records, which would have enabled restaurants to under-report turnover and reduce tax liabilities.

Initial estimates suggest the suppressed sales from 2019/20 onwards were worth at least Rs 70,000 crore, with Andhra Pradesh and Telangana alone accounting for over Rs 5,000 crore.

Sources said suppression of billing records was also detected across thousands of PANs, or permanent account numbers, with some now showing undeclared sales of over Rs 1 crore.

The Income Tax Department has not yet released a formal statement.

Authorities, however, continue to reconstruct deleted billing data, and tax demands, penalties and possible prosecutions are expected once the investigation is complete.