Chandigarh, March 30 – Punjab Excise and Taxation Minister Harpal Singh Cheema announced on Monday that a massive tax evasion racket, involving turnover of around Rs 200 crore, has been uncovered in the hospitality sector.
With 882 establishments already under scrutiny and Rs 2.02 crore recovered so far, Cheema stated that the investigation is rapidly expanding, and the total evasion could potentially reach nearly Rs 500 crore as more data is analyzed.
Highlighting how major urban centers like Mohali, Jalandhar, and Ludhiana have emerged as key hubs for this type of fraud, he emphasized that sectors driven by high cash and hybrid payments are at the core of the scheme.
Cheema told the media here that 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 related to the financial years 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.
Detailing the findings of the ongoing verification, Cheema said, "In the preliminary inquiry conducted so far, 239 cases have been examined, resulting in the detection of turnover suppression of approximately Rs 50 crore."
"This evasion involves a tax of Rs 2.54 crore at a five per cent rate, and our department has so far ensured the recovery of Rs 2.02 crore, with further recovery proceedings still ongoing," he said.
Highlighting the scale of discrepancies across taxpayers, Cheema stated, "We have discovered turnover suppression exceeding 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."
Highlighting sector-specific trends, he said further analysis indicates systemic patterns of under-reporting in high-cash and hybrid-payment segments. He stated that dhabas account for approximately Rs 10 crore of the suppression, followed by small eateries, coffee, and chai bars at around Rs 8 crore, and pizza and fast-food outlets exceeding Rs 6 crore.