I-T dept uncovers Rs 408 crore sales suppression by restaurants

The I-T Department's nationwide survey on restaurants has unearthed a sales suppression of Rs 408 crore. Using AI tools, the department analyzed data from 1.77 lakh establishments, finding large-scale under-reporting of income.

The Income Tax Department's nationwide verification exercise on restaurants regarding turnovers has revealed a suppression of sales amounting to approximately Rs 408 crore.

According to a Ministry of Finance press statement, the investigation targeted tax evasion patterns within the Food & Beverage (F&B) sector following preliminary data analysis initiated in November 2025. "On 8 March 2026, a nationwide survey was conducted on 62 restaurants across 46 cities in 22 States. On a preliminary basis, the exercise revealed suppression of sales amounting to around Rs. 408 crore. Investigations in this regard are underway," the Ministry said.

AI-Enabled Analytics Expose Under-Reporting

The Ministry highlighted the use of AI-enabled analytical tools to perform advanced analytics on transactional data from about 1.77 lakh restaurants, comparing actual transactional data with the turnover declared in Income Tax Returns. "Advanced analytics of transactional data from about 1.77 lakh restaurants in the F&B sector was carried out using AI-enabled analytical tools. The data was compared with the turnover declared in their Income Tax Returns. The analysis revealed large-scale under-reporting of income. In some cases, recorded sales were not fully reflected in financial accounts or tax filings, and certain transactions were excluded from reported sales."

Methods of Sales Suppression

The Ministry's statement noted that several restaurants engaged in the deletion of bulk bills and other modifications to suppress actual sales. In numerous instances, recorded sales were not fully reflected in financial accounts or tax filings. "During the exercise, it was found that several restaurants were engaged in deletion of bulk bills and other modifications to suppress the actual sales."

'SAKSHAM NUDGE' Campaign for Voluntary Compliance

In response to these findings, the department commenced the SAKSHAM NUDGE campaign to guide taxpayers toward correcting these records. This initiative emphasises voluntary compliance and a trust-based approach, encouraging taxpayers to file updated returns under the Income Tax Act. "The Department continues to emphasise voluntary compliance and a trust-based approach. It has commenced the SAKSHAM NUDGE campaign to guide and advise taxpayers to correct their mistakes. Taxpayers are encouraged to file updated returns under Section 139(8A) of the Income Tax Act. In the first phase, emails and messages will be sent to the identified 63,000 restaurants, requesting them to update their returns before 31 March 2026," the Ministry said. (ANI)

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