80 Hyderabad restaurants among 100 flagged in GST check

Hyderabad: Restaurants that were no longer registered under the Goods and Services Tax (GST) kept charging customers the tax anyway, while others claimed credits they were barred from taking, Telangana’s GST department has found.

According to The Times of India, more than 100 restaurants and eateries have been flagged, most of them in Hyderabad. A popular restaurant in the Madhapur-Hi-Tec City belt is among those under scrutiny, officials said.

Tax collected without registration

Around 100 establishments are being examined for collecting GST from customers after their registrations were cancelled, and nearly 10 have already been found doing so. Once a registration is cancelled, a business cannot collect tax or issue tax invoices. Cancellations typically follow a prolonged failure to file returns.

Credit claimed despite the bar

Eateries opting for the concessional 5 per cent GST rate cannot claim input tax credit (ITC) on business purchases and must pay their tax entirely in cash. Officials found several using credits on tax paid for raw materials and other inputs to cut their dues. According to the report, around 80 restaurants and eateries across Hyderabad and other districts fall in this group.

The department is still working out the tax impact. Dues and applicable penalties will be recovered once the assessment is done, officials said.

How they were caught

The irregularities surfaced through artificial intelligence (AI)-based analytics that match GST returns against registration status, supplier invoices, purchase records, sales data and digital payment transactions.

“With analytics, it is becoming increasingly difficult for such frauds to go undetected,” a senior tax official said.

The department is now studying AI-based compliance models used in Tamil Nadu, Chhattisgarh and Maharashtra to tighten GST monitoring.

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