Income tax authorities have leveraged AI tools to uncover substantial tax evasion by biryani restaurant chains in Hyderabad, revealing sales suppression of at least Rs 70,000 crore since the 2019-2020 fiscal year.
Income tax officials using AI tools, including Generative AI and data analysis, have unearthed how a biryani restaurant chains in Hyderabad evaded tax by suppressing sales turnover worth at least Rs 70,000 crore since the 2019-2020 financial year. The IT sleuths minced at least 60 terabytes of transaction data from a pan-India billing software that is used by over hundreds of thousands of restaurants across the country and unveiled sales suppression of at least Rs 70,000 crore, TOI reported.
According to the Income Tax department, its officials used different technology tools, including AI tools, Generative AI, data analysis softwares, and minced data spanning 1.77 lakh restaurant IDs across the country.
As per IT officials, the billing software provider recorded post-sales deletions totaling Rs 13,317 crore out of the Rs 70,000 crore. Digging more into this, officials found that only Andhra and Telangana alone suppressed sales of Rs 5,141 crore.
Which States Are Under Tax Evasion Radar Over Restaurants Not Showing Actual Sales
States including Tamil Nadu, Karnataka, Telangana, Maharashtra, and Gujarat are among top five that suppressed sales and evaded income tax.
The investigation so far has pointed out that the restaurants across the country were making sales, earning money, but reported much less of that in the actual logs, in order to avoid taxes.
Post data mining of over 1.77 lakh restaurants and 60 terabytes of information, officials found that restaurants deleted sales after customers’ payments or tweaked changes in the billing system.
How IT Sleuths Verified Tax Evasion By Restaurants
In order to verify the outcome, IT officials did a survey and visited 40 restaurants in person. A simple comparison of real sales and computer records unearthed Rs 400 crore worth of missing sales.
The highest tax evasion and sales manipulation surfaced from Karnataka, followed by Telangana and Tamil Nadu.