Income Tax Department Launches Nationwide Search on Restaurants After Uncovering Rs 70,000 Suppressed Sales

The income tax department has recently launched its nationwide search operation on restaurants across different cities in India. This comes after the department’s earlier investigation of Hyderabad Biryani restaurants revealed a suppressed turnover of Rs 70,000. These restaurants allegedly manipulated billing software and hid their sales to avoid paying taxes since 2019-20.

Investigators suspect that other restaurants across India are also involved in manipulating their billing system. Therefore, the department expanded its investigation to multiple cities.

Last year in November, during a routine check at some restaurants in Hyderabad, the tax officers observed that there is a mismatch between the figures mentioned in the billing software and the number of customers inside the restaurants. This led to the discovery of the nationwide tax evasion.

The investigators found that the billing software is used by more than one lakh restaurants. The investigators used artificial intelligence and data analytics tools to analyze records from around 1.77 lakh restaurant IDs. They analyzed around 60 terabytes of transactional data, revealing that nearly 27% of total sales were suppressed in some cases.

Investigators believe that these restaurants used several methods to suppress their sales, such as bulk deletion of billing records, deleting cash invoices, and underreporting sales.

Not only this, but many restaurants allegedly entered the sales in their software but later deleted some cash transactions to reduce their income tax liability.