60TB billing data, 1.77 lakh restaurant IDs: How AI uncovered Rs 70,000 crore tax evasion scam starting with Hyderabad biryani chains
Times of India
by U SUDHAKAR REDDYFebruary 19, 2026
AI-Generated Deep Dive Summary
An unprecedented tax evasion scam spanning over Rs 70,000 crore has been uncovered in India's food and beverages sector through an innovative use of AI tools by the Income Tax department. Investigators analyzed 60 terabytes of transactional data from a widely-used pan-Indian billing software, which revealed that over 1.77 lakh restaurants suppressed sales turnover between 2019-20 and 2025-26. This fraudulent activity involved selective deletion of cash invoices, bulk deletions, and under-reporting sales to minimize tax and GST liabilities. The probe, conducted using advanced big data analytics and AI tools like Generative AI, found that nearly 27% of total sales were hidden across India, with post-billing deletions amounting to Rs 13,317 crore.
The scam was uncovered through a detailed digital investigation at the department's digital forensic lab in Hyderabad. Investigators tracked down restaurants linked to GST numbers using open-source data and AI-powered systems. The findings revealed that Andhra Pradesh and Telangana alone accounted for suppressed sales of Rs 5,141 crore, while Karnataka led with deletions worth Rs 2,000 crore. Other states like Tamil Nadu, Maharashtra, and Gujarat also showed significant instances of tax evasion.
This case highlights the critical role of technology in combating financial fraud on a large scale. By leveraging AI tools, authorities were able to detect patterns such as selective deletion of cash invoices, bulk deletions over specific date ranges, and discrepancies between reported sales and actual billing data. The use of Generative AI allowed investigators to map GST numbers to individual restaurants and identify anomalies in the data, leading to the discovery of this massive fraud.
The implications of this scam extend beyond India's borders. Tax evasion on such a large scale not only undermines government revenue but also distorts market competition. Restaurants that follow tax compliance are at an unfair disadvantage when others suppress their sales to reduce tax liabilities. This case underscores the need for stricter regulatory oversight and advanced technological tools to combat financial fraud in the digital
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Originally published on Times of India on 2/19/2026