NEW DELHI — A massive systemic tax fraud has been unearthed within India’s hospitality industry, with authorities identifying approximately ₹70,000 crore in evaded taxes over the last several years. According to a report by The Times of India, the investigation—facilitated by advanced artificial intelligence and big data analytics—reveals a sophisticated pattern of revenue suppression facilitated by widely used billing software.
The Digital Footprint of Deception
The probe centered on a dominant billing ecosystem utilized by over one lakh restaurants nationwide. By deploying AI tools to scrutinize 60 terabytes of data from nearly 1.77 lakh establishments, investigators discovered a coordinated effort to manipulate financial records.
The data revealed that post-transaction, numerous bills were systematically deleted or altered within the software to underreport gross earnings. Key findings from the data analysis include:
- National Impact: Total erased transactions exceeded ₹13,000 crore.
- Regional Concentration: Andhra Pradesh and Telangana accounted for over ₹5,100 crore in suppressed sales.
- Physical Verification: On-site audits of just 40 establishments confirmed ₹400 crore in missing revenue, validating the digital findings.
Geographic and Methodological Trends
While the evasion was national in scope, Karnataka recorded the highest levels of tax suppression, followed closely by Telangana and Tamil Nadu.
Investigators noted that the methods of manipulation ranged from technical "tricks" to blatant filing discrepancies:
- Selective Deletion: Owners primarily targeted cash transactions for deletion, as they leave a smaller trail than digital payments.
- Temporal Erasure: In some instances, entire days or months of sales data were wiped from the system before filing tax returns.
- Direct Underreporting: Many establishments maintained accurate internal records but simply declared a fraction of those earnings to the tax department.
"From the data studied so far, officials estimate that approximately one-fourth of all restaurant sales were hidden from the public exchequer."
A Growing Probe
The investigation originated in Hyderabad and Visakhapatnam before expanding into a nationwide crackdown. By utilizing digital labs to cross-reference 6 years of sales data—totaling ₹2.43 lakh crore—against GST registrations and public listings, officials have signaled that this discovery may only be the "tip of the iceberg."
As authorities pivot to examine other competing billing software systems, the industry faces the prospect of a much broader regulatory overhaul to ensure digital transparency and fiscal compliance.
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