From Hummer to Rolls-Royce: Indian luxury car dealer arrested in customs duty scam

A luxury car dealer from Hyderabad, Basharat Ahmed Khan, was arrested in India’s Gujarat on Thursday by the Directorate of Revenue Intelligence (DRI) for his alleged role in a massive Rs1 billion ($12 million) customs duty evasion scam. He is accused of using forged documents to illegally import high-end vehicles by significantly undervaluing their declared prices.

DRI officials revealed that Khan, the owner of 'Car Lounge' in Hyderabad, imported luxury vehicles from countries such as the US and Japan.

According to media reports, these vehicles were rerouted through Gulf countries and Sri Lanka, where they were converted from left-hand drive to right-hand drive — a requirement for Indian roads — before being brought into the country using fake documents.

The scam involved declaring almost 50% lower value on the import invoices to avoid hefty customs duties. Khan alone is believed to have evaded over ₹70 million (approx. $8.4 million) in duties through the import of eight vehicles.

So far, at least 30 luxury cars have been identified in the illegal imports. The list includes premium models such as:

Khan’s showroom, located opposite the Cyberabad Police Commissionerate, has reportedly been operational for 10 years. The premises also housed a workshop for vehicle modifications.
Officials allege that Khan's business thrived due to his high-profile political connections. Many buyers reportedly paid him in cash, helping them avoid taxes.

Khan was allegedly aided by his business partner, Dr. Ahmed, who stored multiple imported luxury cars at his farmhouse. This was believed to be part of a deliberate attempt to shield assets from law enforcement.

The fraudulent vehicle imports are suspected to have occurred across major cities including:

Companies linked to Khan — CLFIVE Automotives Pvt Ltd, BAK Carlounge Services Pvt Ltd, and BAK Car Lounge Pvt Ltd — are also under DRI scrutiny.

The finance ministry said this Rs250 million ($3 million) seizure is just the beginning. The case is part of a broader crackdown on luxury import frauds, with more arrests and asset seizures likely.

This case highlights how elite financial crimes can exploit international loopholes. The DRI operation has spotlighted the need for tighter scrutiny of luxury imports and is expected to set a precedent in how India tackles white-collar smuggling.