How the Scam Operated
Investigators found that restaurant owners systematically altered or deleted billing records to hide real earnings. Across India, over ₹13,000 crore in bills were erased from a single billing software used by more than 1 lakh restaurants. In Andhra Pradesh and Telangana alone, undisclosed sales exceeded ₹5,100 crore.
The scam primarily involved cash transactions, which were harder to trace, though some restaurants deleted entire months of sales records. Officials confirmed that about one-fourth of total restaurant sales were being hidden from tax authorities.
Investigative Process
Authorities analyzed around 60 terabytes of data from 1.77 lakh restaurants using artificial intelligence and computer tools. They cross-checked digital records with GST data and public listings to identify discrepancies. Field visits to 40 restaurants revealed nearly ₹400 crore in unreported sales during spot verification.
The investigation began in Hyderabad, Visakhapatnam, and neighboring towns, but quickly expanded nationwide once the scale became evident. Karnataka, Telangana, and Tamil Nadu showed the highest levels of evasion, while some restaurants simply understated earnings without altering bills.
Wider Implications
Authorities warn that this could be just the tip of the iceberg. Multiple other billing systems exist that may harbor similar manipulations. Officials are now reviewing software and accounting practices across the hospitality sector to prevent further losses to government revenue.
The probe highlights the growing role of digital tools in both enabling fraud and aiding law enforcement investigations. Analysts say this case could set a precedent for stricter oversight in the food and hospitality industry nationwide.
