Core Insights - An investigation into India's restaurant industry has revealed alleged tax evasion, with several prominent biryani and dining chains under scrutiny for concealing sales amounting to Rs700 billion ($7.7 billion) since the financial year 2019-2020 [1][3] Investigation Details - The Income Tax Department's Hyderabad unit conducted the investigation using forensic data analytics and AI tools to analyze 60 terabytes of billing records from over 100,000 restaurants [2] - The billing software platform analyzed accounts for approximately 10% of India's restaurant billing market, linking to around 177,000 restaurant IDs [3] Findings on Revenue Concealment - Investigators identified suppressed turnover of at least $7.7 billion since 2019-2020, with the department yet to finalize tax demands or penalties on the concealed income [3] - Restaurants across India reportedly executed post-billing deletions totaling Rs133.7 billion, with the highest deletion activity noted in states like Gujarat, Karnataka, Maharashtra, Telangana, and Tamil Nadu [3][4] Patterns of Deletion - A recurring pattern observed was the selective deletion of cash invoices, where restaurants allegedly retained only a portion of cash entries while deleting others to minimize income tax and GST exposure [5] - Investigators also found a "bulk deletion" method, where bills for selected date ranges—sometimes up to 30 days—were erased before tax returns were filed, showing only a fraction of actual sales [5] Scope of the Investigation - The reviewed database encompassed Rs2,430 billion of billing across six financial years from 2019-2020 to 2025-2026 [6] - High-capacity systems and AI tools, including generative AI, were employed to analyze transactions and map GST numbers to individual restaurants using publicly available information [6] - Following initial findings, the Central Board of Direct Taxes has decided to broaden the investigation to include a wider array of restaurants across India [6]