The Gujarat State Tax Department (SGST) has uncovered large-scale tax evasion in the food and restaurant sector under the GST Composition Scheme, officials confirmed. The crackdown follows targeted intelligence and specific complaints, with tax officials first assessing business practices discreetly as customers before conducting full-scale searches.
Coordinated operations on 21st and 22nd September 2025 covered 25 premises linked to 16 taxpayers across Ahmedabad, Vadodara, Surat, Gandhinagar, Bhavnagar, Junagadh and Rajkot, the SGST said.
Fraudulent practices revealed
Investigations uncovered multiple irregularities, including:
- Use of multiple QR codes to divert payments to undisclosed bank accounts.
- Suppression of sales by avoiding issuance of invoices.
- Underreporting turnover to remain within the Rs 1.50 crore Composition Scheme limit, unlawfully gaining financial benefits.
The fraudulent activities aimed to conceal actual sales and evade legitimate tax liabilities.
Financial impact and recovery
So far, the SGST has identified unaccounted transactions worth Rs 52.07 crore, resulting in tax evasion of approximately Rs 4.88 crore, including interest and penalties. Recovery proceedings have been initiated, and legal actions are underway to protect government revenue.
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