Hummer to Rolls-Royce: How Hyderabad luxury car dealer evaded customs by modifying cars in Dubai, Sri Lanka

A well-known luxury car dealer from Hyderabad, Basharat Ahmed Khan, was arrested in Gujarat on Thursday by the Directorate of Revenue Intelligence (DRI) for allegedly being involved in a massive Rs 100 crore customs duty evasion racket.

Khan is the owner of a high-end car showroom called Car Lounge, which has been operating in Hyderabad for over a decade.

According to the DRI, Khan was at the center of a scam that involved importing luxury vehicles from countries like the United States and Japan. These vehicles were first sent to places like Dubai or Sri Lanka, where they were converted from left-hand drive (used in many foreign countries) to right-hand drive, which is required for Indian roads.

After these changes, the cars were brought into India using fake paperwork and undervalued invoices. This allowed Khan to avoid paying the full customs duty, in many cases, he declared the value of the cars to be almost 50 per cent less than their actual price, NDTV reported

The DRI officials have found at least 30 luxury cars that were illegally imported in this manner. The models include the Hummer EV, Cadillac Escalade, Rolls-Royce, Lexus, Toyota Land Cruiser, and Lincoln Navigator, all of which are high-end, premium vehicles.

Khan, who has been running the luxury car showroom for the past 10 years, was alone accused of importing eight such vehicles, causing a customs duty evasion of over Rs 7 crore. The 'Car Lounge' showroom also had a workshop where extensive vehicle modifications and enhancements were carried out, the report said.

According to the DRI, Khan worked closely with his business partner, Dr Ahmed, who stored several of these imported vehicles at his farmhouse. Khan’s business grew rapidly, helped in part by connections with powerful political figures. Some of his customers reportedly paid in cash to avoid taxes.

Companies linked to Khan, CLFIVE Automotives Private Limited, BAK Carlounge Services Private Limited, and BAK Car Lounge Private Limited, are now under scrutiny, according to a TOI report.

The illegal import operation stretched across multiple cities including Hyderabad, Mumbai, Pune, Ahmedabad, Bengaluru, and Delhi. Khan is now in judicial custody, and a further investigation is ongoing.