Hospitality Sector Under Scrutiny: Punjab Finds Significant Tax Evasion

Punjab Detects ₹200 Crore Tax Evasion in Hospitality Sector, Probe May Uncover ₹500 Crore​

Statewide Crackdown Targets 882 Establishments​

Chandigarh, March 30: Punjab Finance Minister Harpal Singh Cheema on Monday said the state government has uncovered tax evasion worth around ₹200 crore in the hospitality sector, with the total figure expected to rise to nearly ₹500 crore as investigations expand.

Addressing a press conference, the minister said that 882 establishments have been brought under scrutiny as part of a statewide crackdown. These include dhabas, restaurants, eateries, bakeries, sweet shops, and catering services.

Data Analytics Drive Expands Across Financial Years​

Cheema said the ongoing exercise is based on data analytics and risk assessment. So far, the investigation has focused on the 2025-26 financial year. Further analysis covering 2023-24 and 2024-25 is underway, which could significantly increase the scale of detected evasion.

“In the preliminary inquiry conducted so far, 239 cases have been examined, leading to the detection of turnover suppression of about ₹50 crore,” the minister said.

₹2.02 Crore Already Recovered from Identified Cases​

According to Cheema, the identified turnover suppression translates into a tax liability of approximately ₹2.54 crore at a 5 percent rate. Of this, ₹2.02 crore has already been recovered, while recovery proceedings are ongoing for the remaining amount.

Breakdown of Suppression Across Taxpayers​

The minister highlighted the extent of discrepancies found during the investigation:

• Suppression above ₹2 crore in 3 taxpayers
• Above ₹1 crore in 6 cases
• Above ₹50 lakh in 18 cases
• Above ₹25 lakh in 26 cases
• Above ₹5 lakh in 91 cases

Sector-Wise and City-Wise Discrepancies Identified​

Cheema said the probe has revealed systemic under-reporting, particularly in segments dependent on cash and hybrid payment methods.

Dhabas accounted for around ₹10 crore of suppression, followed by small eateries, coffee and tea outlets at about ₹8 crore. Pizza and fast-food outlets contributed over ₹6 crore.

Among cities, Mohali reported the highest suppression at ₹8.16 crore, followed by Jalandhar at ₹6.72 crore and Ludhiana at ₹5.48 crore. Patiala and Amritsar recorded lower discrepancies at ₹3.83 crore and ₹99 lakh respectively.

Advanced Analytics and Digital Data Under Scrutiny​

The crackdown is being conducted using advanced data analytics with inputs from the Tax Intelligence Unit and the State Investigation and Preventive Unit.

Cheema said the ‘Bill Liyao, Inam Pao’ scheme has helped identify cases by encouraging consumers to demand bills.

During the scrutiny, officials found that several establishments were using online billing applications. The department has sought detailed transactional data from these platforms.

“Based on risk parameters and comparison with GST returns, we identified possible turnover suppression. The data obtained is now being used for on-ground verification and reconciliation,” he said.

UPI and Digital Payment Data to Strengthen Probe​

The minister added that the department is collecting UPI transaction data and other digital payment details to improve accuracy in matching actual receipts with reported turnover.

He said the remaining cases are under verification, and the entire detection and recovery exercise is expected to be completed within one month.