What began as a routine inspection of biryani outlets in Hyderabad in November 2025 has since snowballed into one of India’s largest tax evasion probes, with authorities uncovering a systematic racket in the food and beverage (F&B) sector. On 8 March 2026, the Income Tax Department conducted a nationwide survey across 62 restaurants in 45 cities spanning 22 states, revealing a preliminary suppression of sales worth approximately ₹408 crore.
Authorities estimate the total concealed turnover across the sector since 2019–20 could be as high as ₹70,000 crore making this one of the largest tax crackdowns in India’s restaurant industry. The restaurants allegedly used popular billing software to selectively delete cash invoices before filing their tax returns a tactic now being dubbed the “vanishing bill trick.” As the probe widens, the government has simultaneously launched the SAKSHAM NUDGE campaign, encouraging voluntary compliance from flagged businesses before enforcement action is taken.
AI That Caught Them All
Investigators examined nearly 60 terabytes of transactional data covering billing transactions from approximately 1.77 lakh restaurant identification numbers, spanning six financial years from 2019–20 to 2025–26, a cumulative billing volume of around ₹2.43 lakh crore.
Using high-capacity digital forensic systems and generative AI tools, authorities identified a telling pattern: many restaurants first recorded all transactions card, UPI and cash in their billing systems for internal control purposes and then selectively deleted cash invoices before filing income tax and GST returns to report lower sales. In other instances, entire days or even months of billing data were wiped out before filing returns reflecting minimal income.
Over 27 per cent of the surveyed restaurants are estimated to have engaged in such evasion. The CBDT made its findings unambiguous in an official statement: “The analysis revealed large-scale under-reporting of income. In some cases, recorded sales were not fully reflected in financial accounts or tax filings, and certain transactions were excluded from reported sales.”
State-wise data showed Karnataka recording the highest deletion figures at around ₹2,000 crore, followed by Telangana at ₹1,500 crore and Tamil Nadu at ₹1,200 crore. Maharashtra and Gujarat rounded out the top five states where evasion was detected. The survey covered cities as far-flung as Delhi, Shimla, Guwahati, Madurai, Coimbatore, Siliguri, Bengaluru, Patna, Chandigarh, and Cuttack, among many others.
From Hyderabad’s Biryani Lanes to a National Reckoning
The breakthrough came after officials examined a widely used billing software platform employed by over one lakh restaurants nationwide accounting for roughly 10 per cent of India’s restaurant market. Investigators deployed high-capacity computing systems and AI tools, including Generative AI, to rapidly map GST numbers to corresponding restaurants using publicly available information and open-source databases.
Officials clarified that the current findings relate to just one billing software platform and that other systems widely used in the hospitality sector may also come under similar scrutiny, suggesting the ₹70,000 crore figure could well be the tip of the iceberg. In response to the findings, the government has chosen to lead with persuasion before punishment.
Under the SAKSHAM NUDGE campaign, the 63,000 identified restaurants will first be sent emails and messages in the initial phase, asking them to update their tax returns before the statutory deadline of 31 March 2026, so as to avoid the issuance of tax notices and other litigation. Taxpayers are being encouraged to correct discrepancies by filing updated returns under Section 139(8A) of the Income Tax Act. Authorities have confirmed that those who do not voluntarily comply will face formal tax demands, penalties, and possible prosecution.
The Logical Indian’s Perspective
The “vanishing bill” scandal is a stark reminder that tax evasion is not a victimless crime. Every deleted invoice, every wiped sales record, is public money quietly pocketed, funds that could have built a school in a small town or staffed a hospital in an underserved district.
It is encouraging, however, that the government’s first instinct has been to nudge rather than punish: the SAKSHAM campaign offers errant businesses a dignified path to correction, which reflects a maturing approach to tax administration.
What is equally remarkable is the role of artificial intelligence in levelling a playing field long tilted by opacity technology has done in months what paper trails never could. The onus now rests on the industry to embrace transparency not out of fear, but out of a genuine sense of civic responsibility.
Income Tax Cracks Down on Restaurants in ₹70,000 Crore Tax Scam
— Dr. Rakesh Bansal (@iamrakeshbansal) March 9, 2026
India’s Income Tax Department has launched a big nationwide raid on restaurants involved in a huge tax scam worth ₹70,000 crore. It all started with checks on popular biryani chains in Hyderabad, but now it’s… pic.twitter.com/2Jjhp9jtHG
