Punjab’s “cash-rich” food and beverage sector has not been immune to the Rs 70,000-crore PetPooja GST scam that has rocked India. Hundreds of restaurants in the state have been found to be using specific features of PetPooja software to suppress sales records by deleting cash bills, and in turn evading the payment of goods and services tax (GST) of over Rs 100 crore.
Sources in the state government has said an investigation by the Taxation Department has brought to the fore tax evasion worth several crores by restaurants and eateries, mainly in the cities of Ludhiana, Amritsar and Jalandhar. The Income Tax authorities, which had originally unearthed the scam nationally, had issued notices to several eatery owners in the state, which led the department to launch a full- fledged investigation.
“We are in the process of completing the investigation. Once it ends, the exact extent of the tax evasion will be known. Our preliminary findings suggest that the evasion runs into over Rs 100 crore, as the sales data suppression was going on for almost five years,” a senior functionary in the state government told The Tribune. He added that sales records of thousands of eateries or restaurants in the state were being investigated by comparing the income tax returns with the records of transactions. He said even the recovery of taxes evaded by these businessmen had also been initiated.
He further said the analytics was taking time as it took the state government a lot of time in getting access to the historical billing logs (before deletion) from the servers of the company providing the software. There are around 11,000 tax-paying food businesses in the state and their combined annual sale is to the tune of Rs 7000 crore per annum. The highest number of eating joints are in Ludhiana at 1,500.
The PetPooja software reportedly allowed the eateries to bulk-delete cash transactions at the end of the month. While these eating joints record all orders – on cash, credit card, UPI – in a day, but at the end of the month, they would use a backend login to wipe out 30-50 per cent of the bills paid in cash. These deleted transactions ensured that the total sales turnover of the eating joints would be significantly lower and thus they did not pay tax on these suppressed sales. The government, in the process, lost out on the GST collections.
The income tax authorities had unearthed this scam using big data and AI analytics. While most businesses had deleted the cash bills, many had also maintained two sets of data – one of actual sales and other modified data after deletion of sales in cash. Sources say they have also found instances where the UPI transactions of the established businesses were not linked to their business accounts but to individual accounts of relatives or friends, which again led to suppression of sales and subsequent tax evasion.
