Hyderabad’s Car Lounge owner Basharath Khan arrested by DRI in approx Rs 100 crore luxury car import fraud

Hyderabad: City-based businessman, Basharath Khan, owner of Car Lounge showroom in Gachibowli, was arrested by the Directorate of Revenue Intelligence (DRI) in a major customs duty fraud of around Rs 100 crore in the import of high-end luxury cars.

Based on specific intelligence inputs, the DRI found that luxury vehicles were imported into India at nearly 50 per cent of their value through deliberate under-invoicing and misdeclaration at Indian ports. Basharath was picked up by the DRI sleuths earlier this week and produced before a special court hearing this case in Ahmedabad. Sources indicated that the fraud would be around Rs 100 crore.

Accused provides cars to politicians holding office

The showroom, Car Lounge, is on the Raidurg-Gachibowli road, Hyderabad. The accused hails from Nampally, Vijay Nagar colony. His elder brother owns a couple of workshops.

A source, speaking to NewsMeter, said, “Over the last 10 years, the showroom has been operational in Hyderabad. Earlier, he used to sell small car,s but later, as he grew his connections, Basharath started selling high-end cars. These cars are put on display at the showroom. Many vehicles were sold to VIPs and cars were lent to be ‘used’ by politicians, cutting across all parties. Basharath held a good rapport with a few parliamentarians.

From a humble beginning at Vijay Nagar Colony in Nampally, he leapt forward quickly through his network within politicians. He is known for hosting high-profile parties for politicians who came down from Delhi.

Customers would pay Bashrath in cash to avoid taxes

Bashrath’s partner is Dr Ahmed, and both have a partnership in the firm. These high-end cars were also stationed at the farmhouse.

Sources also indicated that many of his customers would purchase cars by ‘cash’ to avoid paying taxes and even help convert black money to white. From a middle-class family, he quickly grew rich thanks to his street smarts.

How was the fraud committed in importing high-end cars?

Vehicles originally sourced from the USA and Japan were first shipped to Dubai or Sri Lanka for conversion from left-hand drive to right-hand drive (RHD) and other modifications. After these alterations, the cars were imported into India using falsified documents that significantly undervalued the vehicles, thereby evading substantial customs duties.

The investigation revealed that over 30 luxury vehicles—including premium models such as the Hummer EV, Cadillac Escalade, Rolls-Royce, Lexus, Toyota Land Cruiser and Lincoln Navigator—were brought into the country using this modus operandi. The importers involved in the scam are based across major cities, including Hyderabad, Mumbai, Pune, Ahmedabad, Bengaluru and Delhi. The estimated duty evasion exceeds Rs 25 crore.

In a major breakthrough, the DRI has arrested one of the key importers (Khan) based in Hyderabad, who is alleged to have imported eight such luxury vehicles, resulting in a customs duty evasion of over Rs 7 crore. He has been remanded to judicial custody by the Chief Judicial Magistrate (CJM) court in Ahmedabad.

The DRI continues to investigate other importers and end-users who are suspected to have facilitated or benefited from these fraudulent imports.

10 cars were purchased from Basharath

Sources indicated that 10 cars were purchased from Basharath. DRI is on the chase to identify these customers. The showroom owned by Basharath had an in-house workshop behind the showroom where many car accessories and modifications were installed in vehicles.