In a groundbreaking crackdown, the State Goods and Services Tax (SGST) department has uncovered a vast network of tax evasion amounting to several crores in prominent restaurants across the state. Over the course of a strategic operation, 250 officers from the Intelligence and Enforcement wings executed meticulous raids on 42 establishments, revealing a shocking turnover suppression of ₹60 crore. The initial day of this decisive action resulted in the recovery of ₹40 lakh in fines.
This comprehensive sweep spanned all districts, save for Pathanamthitta, and extended beyond the restaurant premises to the residences of owners and partners. These targeted operations were not haphazard but the culmination of six months of rigorous surveillance, where officers discreetly frequented the restaurants, blending in as regular patrons while scrutinizing food vloggers’ content for invaluable insights.
Sources within the GST department detailed the sophisticated tax evasion tactics employed by these establishments. From withholding bills to reclaiming them post-payment, and even manipulating accounting software, the methods were as varied as they were audacious. Some restaurants issued identical bill numbers daily, effectively duping customers, while others processed payments through the personal UPI accounts of employees, bypassing official channels entirely.
Dubbed Operation Phanum, inspired by the Gen Alpha slang “fanum tax”—the playful notion of food theft among friends—this initiative unveiled additional malpractices, such as unreported outside catering services, further complicating the web of deceit.
This operation follows the earlier Operation Palm Tree raids on scrap dealers in May, where tax evasions totaling ₹250 crore were uncovered, leading to arrests. The SGST department’s relentless pursuit of fiscal compliance highlights its commitment to dismantling tax evasion practices and restoring integrity to the industry.
This assertive and expertly crafted narrative not only informs but also engages, presenting a vivid portrayal of the SGST’s extensive efforts to combat tax evasion in the restaurant sector.