From Missing Biryani Bills to ₹70,000 Crore Shock: India’s Massive Digital Tax Crackdown

A Hyderabad biryani check reveals ₹70,000 crore in hidden sales nationwide, highlighting India’s digital tax enforcement revolution.

Pune |20 February, 2026- In a stunning revelation, a routine inspection of a few biryani restaurants in Hyderabad has snowballed into one of India’s largest digital tax investigations. The Income Tax Department estimates that undisclosed sales across the country could total a staggering ₹70,000 crore. The probe, which began late last year, initially appeared to be a standard check of restaurant billing systems. However, officers quickly noticed discrepancies between the number of customers dining in and the sales figures reported. “At first, it seemed like a local issue, but the scale soon became apparent,” said a senior Income Tax official involved in the investigation.

Investigators discovered that many restaurants were using the same billing software, which traced back to Ahmedabad. Accessing nearly 60 terabytes of billing data from over 1 lakh restaurants across India, digital forensics teams began reconstructing deleted invoices at a specialized lab in Hyderabad. While some transactions had been removed from front-end records, backend logs retained traces, enabling authorities to rebuild the data using AI tools. “Even if invoices are deleted on the front end, cloud-based systems leave digital footprints,” explained Dr. Ramesh Iyer, a forensic technology expert. “Modern AI tools allow investigators to reconstruct years of data accurately, which is a game-changer for tax enforcement.”

The analysis of six years of billing data revealed that restaurants had generated approximately ₹2.43 lakh crore in bills, of which ₹13,000 crore worth of transactions had allegedly been deleted. Methods varied: some establishments deleted select cash bills daily, others removed records spanning several weeks, and a few maintained internal records while underreporting turnover in tax filings. Initial findings showed Karnataka with the highest deleted transaction value at around ₹2,000 crore, followed by Telangana at ₹1,500 crore. Tamil Nadu, Maharashtra, and Gujarat also revealed significant discrepancies. In Andhra Pradesh and Telangana alone, scrutiny of 3,734 PAN-linked entities suggested suppressed sales exceeding ₹5,000 crore. Focused audits of 40 restaurants in these states uncovered nearly ₹400 crore in unreported turnover, with some outlets allegedly hiding up to 25% of total sales.

The Central Board of Direct Taxes (CBDT) has confirmed that the probe will extend beyond the initial billing software platform. Authorities are cross-verifying reconstructed data with income tax returns and bank records, with notices and penalties expected soon. Experts say the case highlights the growing importance of digital footprints in financial audits. “Technology now makes it extremely difficult to hide revenue in cloud-based accounting systems,” said Sunita Rao, a chartered accountant and tax consultant. What began as a mismatch in a few biryani bills has now unveiled a nationwide pattern of potential tax suppression, emphasizing the pivotal role of AI-driven analytics and digital forensics in modern financial oversight.

The Hyderabad biryani case has exposed the scale of hidden sales and tax evasion in India’s restaurant industry. As AI and digital forensics become standard in audits, businesses must maintain transparent records to comply with the law, while authorities continue to leverage technology to curb financial irregularities.

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