Biryani tax scam: AI, big data expose Rs 70,000 crore scandal across India; nationwide probe underway
Using AI and sophisticated data analytics, investigators identified patterns suggesting that bills were frequently deleted or altered after customers had completed payments
PTC Web Desk: A nationwide tax evasion racket, informally dubbed the “biryani tax scam”, has come under the scanner after investigators uncovered widespread manipulation of restaurant billing software using advanced data analytics and artificial intelligence.
The probe, which initially began with routine inspections of eateries in Hyderabad, soon widened in scope when authorities detected irregularities in digital billing systems used by restaurants across multiple states. What started as a local inquiry has now evolved into a large-scale investigation involving financial records from more than one lakh establishments across the country.
Officials examined nearly 60 terabytes of billing data linked to approximately 1.77 lakh restaurant identification numbers. Using artificial intelligence tools and sophisticated data analytics, investigators identified patterns suggesting that bills were frequently deleted or altered after customers had completed payments. Such practices allegedly enabled restaurants to under-report revenue and evade tax liabilities.
According to findings cited in media reports, transaction data covering six financial years, from 2019-20 to 2025-26, was scrutinised. The analysis covered a cumulative billing volume of around Rs 2.43 lakh crore. Within this dataset, post-billing deletions amounting to over Rs 13,000 crore were detected. Authorities estimate that the total suppressed turnover nationwide could be as high as Rs 70,000 crore.
In Andhra Pradesh and Telangana alone, concealed sales are estimated to exceed Rs 5,100 crore. To validate digital evidence, enforcement teams conducted on-ground inspections at 40 restaurants, comparing actual sales figures with entries recorded in billing software. These physical verifications reportedly revealed nearly Rs 400 crore in unaccounted sales.
Investigators also used generative AI tools to cross-reference GST registration numbers with publicly available information, enabling quicker identification of discrepancies between declared turnover and actual transactions.
States, including Karnataka, Telangana, Tamil Nadu, Maharashtra and Gujarat, have emerged as major centres of concern, with Karnataka reporting the highest value of deleted bills in the preliminary assessment.
Based on sample analysis, officials believe that between 25 and 27 per cent of restaurant sales across India may have been suppressed through digital manipulation.
Following developments in Hyderabad, the Central Board of Direct Taxes (CBDT) has expanded the investigation nationwide. Authorities have cautioned that the findings so far may represent only a fraction of the actual scale of the irregularities, noting that several other billing software platforms are widely used within the hospitality sector.
Further inquiries are underway.