How AI Mapped GST Numbers And Billing Patterns To Bust Rs.70,000 Crore Biryani Tax Racket
Police investigators say advanced technology, not just traditional inspections, cracked open one of the country's biggest alleged tax evasion rackets linked to restaurant billing practices. What began as routine scrutiny of a few eateries in Hyderabad eventually widened into a nationwide probe after unusual billing patterns raised suspicion.
Authorities now estimate that restaurants may have collectively hidden turnover worth nearly Rs.70,000 crore, with artificial intelligence and data analytics emerging as the central tools behind the discovery.
Routine checks that exposed unusual billing
The investigation initially focused on biryani outlets in Hyderabad. During inspections, officials noticed discrepancies between customer transactions and the sales recorded in billing software. The irregularities prompted a deeper digital audit.
Police and tax teams analysed a massive database used by over one lakh restaurants. Nearly 60 terabytes of data connected to around 1.77 lakh restaurant IDs were examined, according to a report by The Times of India.
Their analysis revealed a consistent pattern. Bills were frequently deleted or modified after customers had already paid, allowing restaurants to show lower revenues and reduce tax liability.
AI and big data analytics track hidden transactions
Investigators used computer-based analytics and artificial intelligence, including Generative AI, to study transaction records covering six financial years from 2019-20 to 2025-26. The dataset represented total billing of approximately Rs.2.43 lakh crore.
Across India, authorities identified post-billing deletions worth more than Rs.13,000 crore within the software systems. From these findings, officials estimated suppressed turnover at roughly Rs.70,000 crore.
In Andhra Pradesh and Telangana alone, hidden sales crossed Rs.5,100 crore. To confirm the digital evidence, teams conducted physical inspections at 40 restaurants and compared actual sales with software entries. These checks uncovered nearly Rs.400 crore in suppressed sales.
AI tools were also deployed to match GST numbers with restaurant locations using open-source and publicly available online information, helping investigators quickly pinpoint inconsistencies.
States emerge as evasion hotspots
Data analysis indicated that the issue was not localised. Karnataka, Telangana, Tamil Nadu, Maharashtra and Gujarat appeared as major centres of suspected evasion, with Karnataka recording the highest value of deleted bills.
Based on sample calculations, authorities estimate that 25 to 27 per cent of restaurant sales nationwide may have gone unreported.
Probe widens across India
After the Hyderabad findings, the Central Board of Direct Taxes expanded the investigation across the country. Officials cautioned that the discoveries so far could be only "the tip of the iceberg", noting that several other billing software platforms are widely used in the restaurant industry and may require scrutiny.
