COURTKUTCHEHRY SPECIAL ON HYDERABAD’s BSED MULTI-CRORE BIRYANI SCAM
Hyderabad Biryani Probe Uncovers ₹70,000 Crore Tax Evasion Across India
Income Tax Department finds restaurants manipulated billing software to hide turnover
Case highlights gaps in compliance with GST and Income Tax laws
By Our Legal Correspondent
New Delhi: February 19, 2026:
A routine Income Tax (I-T) probe into popular biryani joints in Hyderabad has exposed a massive ₹70,000 crore tax evasion scam involving restaurants across India. The investigation revealed that thousands of eateries suppressed their sales turnover by manipulating billing software, thereby avoiding payment of Goods and Services Tax (GST) and income tax. This discovery has sent shockwaves through the food and beverage industry, raising serious questions about compliance and enforcement of tax laws.
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How the Scam Was Uncovered
- The Hyderabad investigation unit of the I-T Department analyzed 60 terabytes of transactional data from a pan-India billing software used by over one lakh restaurants.
- Officials found that restaurants erased bills worth ₹13,000 crore, while suppressing turnover amounting to ₹70,000 crore since the 2019–20 financial year.
- The scam was not limited to Hyderabad; it extended across multiple states, making it one of the largest tax evasion cases in India’s hospitality sector.
Relevant Laws Involved
- Income Tax Act, 1961 – Restaurants are required to declare their true income and pay tax accordingly. Suppressing turnover violates provisions related to concealment of income.
- Goods and Services Tax (GST) Act, 2017 – GST is levied on food and beverages sold by restaurants. Manipulating billing software to avoid GST payments constitutes tax fraud.
- Prevention of Money Laundering Act (PMLA), 2002 – If proceeds from tax evasion are laundered, PMLA provisions may apply.
- Information Technology Act, 2000 – Manipulation of billing software could also fall under cybercrime provisions if proven intentional.
Impact on the Economy
- Revenue Loss: The government potentially lost thousands of crores in tax revenue, affecting public welfare schemes.
- Market Distortion: Honest businesses paying taxes were placed at a disadvantage compared to those evading taxes.
- Consumer Trust: The scam undermines confidence in the food and beverage industry, which is a major contributor to India’s service sector.
Enforcement Action
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- The I-T Department is calculating the exact tax liability along with penalties.
- Raids and surveys are expected to expand to other cities where the same billing software was used.
- Authorities may initiate prosecution under Section 276C of the Income Tax Act (willful attempt to evade tax) and Section 132 of the GST Act (punishment for tax evasion).
Expert Views
Tax experts say the case highlights the need for real-time monitoring of billing software and stricter enforcement of GST compliance. Legal professionals argue that the scam demonstrates how loopholes in technology can be exploited and call for stronger digital audit mechanisms.
Conclusion
The Hyderabad biryani probe has exposed one of the largest tax evasion scams in India’s restaurant industry. By manipulating billing software, eateries across the country suppressed turnover worth ₹70,000 crore, violating both GST and income tax laws. The case underscores the urgent need for stronger compliance systems, better monitoring, and stricter enforcement to protect government revenue and ensure fairness in the market.
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