Rs 700 billion ‘Biryani tax scam’ uncovered using AI in India
New Delhi: A massive nationwide tax evasion scandal worth Rs 700 billion has been uncovered in India during a major crackdown by the Income Tax Department. The scandal is being dubbed the “Biryani Tax Scam.”
According to Kashmir Media Service, the probe began with routine inspections at prominent biryani outlets in Hyderabad, including Pista House, Shah Ghouse and Mehfil. However, investigators soom realized that the scheme was far more extensive, involving a well-organised network of restaurants operating across India.
The breakthrough came after analysing 60 terabytes of transactional data from a pan-India billing software platform used by more than 100,000 restaurants. The software, which controls roughly 10% of the country’s restaurant billing market, provided access to billing records linked to 177,000 restaurant IDs across India. Investigators found that the system could delete up to 30 days of complete sales records with a single click.
Since cash transactions are hard to trace, restaurants reportedly erased cash receipts from their books and disclosed only a small portion of actual sales. On average, 25 to 27 percent of total sales were kept off the record to reduce payable Income Tax and GST.
Using big data analytics and AI tools, investigators examined transactions spanning six financial years from 2019–20 to 2025–26, covering total billing of approximately Rs 2.43 trillion. According to officials, eateries suppressed sales turnover of at least Rs 700 billion during this period. Across India, the software provider recorded post-billing deletions totalling Rs 133 billion out of the Rs 700 billion.
The highest levels of evasion were detected in Tamil Nadu, Karnataka, Telangana, Maharashtra, and Gujarat.
Officials believe the current findings may only be the tip of the iceberg, noting that multiple billing platforms operate in the sector and could face similar backend scrutiny.
