The Great Indian Biryani Scam: How taxmen used AI to uncover Rs 70,000 Crore fraud?

In one of the biggest crackdown on the restaurant sector, Central Board of Direct Taxes (CBDT) authorities have reportedly unearthed a massive Rs 70,000 crore tax fraud involving popular biryani restaurant chains, in what is now being called “the Great Indian Biryani Scam”.

According to a report by the TOI, tax sleuths have found that some 1.77 lakh eateries across several states hid their daily sales to avoid taxes over the last six financial years.

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The shocking discovery was made following routine searches at popular eateries in Telangana and Andhra Pradesh. As per the report, tax authorities had begun to search some biryani chains in Hyderabad, Visakhapatnam and other South Indian cities.

During the searches, the officials came across a common billing software that was being used by these eateries to conceal their actual sales. The discovery prompted the Central Board of Direct Taxes (CBDT) to widen the probe across the country.

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How did tax sleuths underneath the mega scam using AI tools?

After the probe was widened to pan-India restaurants, tax officials recovered around 60TB sales data. This could have taken them years to find the fraud but thanks to the advanced analytics and Generative AI tools, they managed to scan billing transactions worth Rs 2.43 lakh crore between 2019–20 and 2025–26 within a short span of time.

The data was analysed at the Income Tax Department’s digital forensic lab in Hyderabad. They used AI tools to match GST numbers with restaurants and detected the sales fraud using open-source intelligence.

What did the probe reveal?

The records showed that these eateries suppressed sales worth around Rs 70,000 crore since 2019-20. The tax sleuths also believe that this could just be the tip of the iceberg.

Karnataka eateries saw over Rs 2,000 crore deleted sales, followed by Telangana and Tamil Nadu’s Rs 1,500 crore and 1,200 crore, respectively. In Andhra Pradesh and Telangana, just 40 restaurants had hidden 400 crore sales with total fraud to the tune of Rs 5,141 crore.

According to the investigation, restaurants used to delete cash invoices to show lower revenues on records. Some of the restaurants, however, didn’t delete the records and simply reported lower sales in the GST filings.