I-T Department Launches Pan-India Survey in 70 Restaurants Across 45 Cities Over Suspected Hidden Sales

After uncovering the large-scale suppression of sales at biryani restaurants in Hyderabad and Telangana, the Income Tax Department has expanded its investigation by launching a pan-India survey of around 70 restaurants in Andhra Pradesh, Delhi, Maharashtra, Karnataka, Gujarat, etc.

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Multiple restaurants across Karnataka and Tamil Nadu, along with other states, were found to be hiding their sales worth over Rs 70,000 crore since 2019-20.

Now the investigation wing of the income tax department has launched the survey in 70 restaurants across 45 cities, as these restaurants are also suspected to be involved in sales suppression by manipulating their billing software. The survey was followed by the directions of the Central Board of Direct Taxes (CBDT) as per Section 133A of the Income Tax Act.

Here are the cities covered under the survey:

The investigation initially began from biryani restaurants in Hyderabad. In a detailed survey in Telangana, where around 40 restaurants were investigated, the officials estimated tax evasion of around 500 crore.

The Income Tax Department examined around 60 terabytes of transactional data from pan-India billing software used by over one lakh restaurants.

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The earlier investigation revealed that many restaurants allegedly deleted the cash transactions from their software at the end of the month to show a reduced income and avoid income tax and GST. Only a portion of cash transactions was kept to avoid suspicion.

Additionally, some restaurants allegedly deleted several invoices for specific date ranges. While some entities underreported their sales in the income tax returns.

Investigators used AI tools to study data from about 1.77 lakh restaurant IDs and connected their GST and PAN details using information available online.