The Gujarat State Tax Department (SGST) has busted cases of tax evasion in the Food/Restaurant sector under the GST Composition Scheme. Based on specific complaints and intelligence inputs, the state tax officials first visited several premises discreetly as customers to assess actual business activity and billing processes. Thereafter, the SGST department conducted coordinated search operations on 21st and 22nd September 2025 across 25 premises linked to 16 taxpayers operating in Ahmedabad, Vadodara, Surat, Gandhinagar, Bhavnagar, Junagadh, and Rajkot, an official statement said.
Investigations revealed that taxpayers in this sector were engaging in fraudulent practices such as the use of multiple QR codes to divert payments to undisclosed bank accounts, suppression of sales by not issuing invoices, and willfully underreporting actual turnover to remain within the ceiling limit of ₹1.50 Crore so as to take undue advantage of the Composition Scheme for pecuniary gain. These manipulations were clearly intended to conceal actual sales turnover and evade legitimate tax liabilities.
The investigations have so far unearthed unaccounted transactions to the tune of ₹52.07 Crore involving tax evasion of about ₹4.88 Crore (including interest and penalty). The State Tax Department has initiated recovery proceedings and is pursuing appropriate legal action to safeguard government revenue.
