Punjab flags Rs 200cr evasion by eateries, says it may hit Rs 500cr

Chandigarh: Punjab finance minister Harpal Singh Cheema on Monday claimed to have revealed a Rs 200-crore turnover evasion racket in Punjab's hospitality sector, claiming that it exposed "deep-rooted and systemic" under-reporting across dhabas, eateries, restaurants, and fast-food outlets.Addressing a press conference, Cheema said, "Dhabas account for approximately Rs 10 crore of the suppression, followed by small eateries, coffee, and chai bars at Rs 8 crore, and pizza and fast-food outlets exceeding Rs 6 crore. We discovered turnover suppression above Rs 2 crore in three taxpayers, above Rs 1 crore in six taxpayers, above Rs 50 lakh in 18 taxpayers, above Rs 25 lakh in 26 taxpayers, and above Rs 5 lakh in 91 taxpayers." "With 882 establishments already under the scanner and Rs 2 crore recovered so far, the investigation is rapidly expanding, and the total evasion could surge to nearly Rs 500 crore as more data is analysed," he added. He said major urban centres like Mohali, Jalandhar, and Ludhiana had emerged as key hubs of such suppression. "Sectors driven by high cash and hybrid payments are at the centre of the fraud. Backed by advanced data analytics, inputs from TIU and SIPU, and the success of the ‘Bill Liyao, Inam Pao' scheme, the state govt has intensified enforcement," said Cheema, while issuing a warning that strict action will follow against every violator while ensuring full use of technology to safeguard the state's revenue. "Through a comprehensive, state-wide, data-driven enforcement exercise covering hotels, dhabas, eateries, bakeries, sweet shops, restaurants, catering services, and similar establishments, we have identified a total of 882 establishments pertaining to FY 2025-26. With further analysis and the inclusion of data pertaining to the financial years 2023-24 and 2024-25, the total magnitude of evasion is likely to reach approximately Rs 500 crore," he said. Cheema informed that in the preliminary inquiry, 239 cases had been examined, resulting in the detection of turnover suppression of approximately Rs 50 crore. "This evasion involved a tax of Rs 2.5 crore at a 5% rate, and our department has so far ensured the recovery of Rs 2 crore, with further recovery proceedings still ongoing." Providing a district-wise breakdown, the minister said, "Mohali has reported the highest turnover suppression of Rs 8.2 crore, followed by Jalandhar with Rs 6.7 crore and Ludhiana with Rs 5.5 crore, making them the major contributors to the detected evasion." He added Patiala and Amritsar had shown comparatively lower discrepancies, with Rs 3.8 crore and Rs 0.9 crore respectively. "During detailed scrutiny of business data by the State Investigation and Preventive Unit, it was observed that a significant number of such establishments were using online billing applications."