₹408 Crore Sales Suppression Detected in Restaurant Sector
₹408 Crore Sales Suppression Detected in Restaurant Sector
Income Tax Department Conducts Nationwide Verification of Restaurants for Possible Turnover Suppression
The Income Tax Department has undertaken a nationwide verification exercise focusing on possible tax evasion practices within the Food and Beverage (F&B) sector.
Investigations initiated in November 2025 indicated that some restaurants may have been manipulating their accounting records by removing or modifying billing information in order to conceal actual sales figures.
Using AI-based data analytics, authorities reviewed transactional information relating to approximately 1.77 lakh restaurants across the country. The analysis compared transaction data with the income reported in their Income Tax Returns. The findings suggested widespread under-reporting of revenue, with certain establishments not fully reflecting recorded sales in their financial statements and tax filings.
As a follow-up action, the department conducted a survey operation on 8 March 2026, covering 62 restaurants across 46 cities in 22 states. Initial findings indicate possible suppression of sales totaling about ₹408 crore. Detailed investigations in these cases are currently underway.
The department continues to promote voluntary tax compliance through a trust-based approach. Under the SAKSHAM NUDGE initiative, taxpayers are being guided to review their records and make necessary corrections. Restaurants that may have discrepancies are encouraged to revise their returns under Section 139(8A) of the Income-tax Act.
In the first phase of the campaign, emails and SMS alerts will be sent to around 63,000 restaurants, advising them to verify their records and update their returns before 31 March 2026.
Also Read:
1. Income Tax Rules 2026: Major HRA Changes
2. PAN Quoting Requirements Under Draft Income-tax Rules, 2026: Complete List of Mandatory Transactions and Revised Thresholds
Read More: Union Budget 2026 – CA Cult
