A prominent luxury car dealer from Hyderabad, Basharat Khan, has been arrested in Gujarat for his alleged involvement in a massive customs duty evasion racket worth nearly Rs 100 crore. According to officials from the Directorate of Revenue Intelligence (DRI), Khan manipulated the import process of high-end vehicles by undervaluing them and using fake documentation to bring the cars into India illegally.
Khan, who runs the ‘Car Lounge’ showroom in Hyderabad and has been in the business for over a decade, is accused of orchestrating a complex network for smuggling luxury cars into the country. These cars, which were sourced from the United States and Japan, were first routed through third countries like Dubai and Sri Lanka. There, the vehicles were converted from left-hand drive to right-hand drive configurations to meet Indian road norms.
Once altered, the cars were shipped into India with falsified documents and undervalued invoices, enabling the evasion of massive customs duties at times as much as 50% below the actual value of the vehicle. DRI officials estimate that at least 30 luxury vehicles were imported using this method, including premium brands such as Rolls-Royce, Hummer EV, Cadillac Escalade, Lexus, Lincoln Navigator, and Toyota Land Cruiser.
Khan alone is accused of importing eight such vehicles, allegedly causing over Rs 7 crore in customs losses. His showroom also operated a modification workshop where these cars were further customized and prepared for high-end clients. Authorities have also revealed that many of these vehicles were stored at a farmhouse belonging to Khan’s business partner, Dr Ahmed.
What makes the case even more significant is the profile of the clientele involved. Khan reportedly had connections with several influential political figures and businessmen who preferred to purchase these imported vehicles in cash transactions, further avoiding any trace of tax liability. These vehicles were then sold across major Indian cities including Hyderabad, Delhi, Mumbai, Bengaluru, Pune, and Ahmedabad.
The DRI's investigation highlights the depth of the fraudulent network and the systematic abuse of import protocols to benefit from huge tax savings. The scam also raises questions about the loopholes in India’s vehicle import system, particularly regarding third-country routing and conversion compliance.
Khan has been remanded to judicial custody as the investigation continues. Authorities are now probing the involvement of other associates, examining financial transactions, and tracking additional vehicles that may have entered the country using similar methods. The case serves as a strong reminder of the importance of regulatory oversight in the luxury automobile sector and may lead to a tightening of rules around vehicle imports and high-value purchases in India.
