HYDERABAD: The Directorate of Revenue Intelligence (DRI) has arrested a luxury car dealer from Hyderabad in connection with a large-scale customs duty evasion racket linked to the import of high-end vehicles.

Basharat Ahmed Khan, proprietor of Car Lounge, was taken into custody in Ahmedabad and has been remanded to judicial custody by a magistrate’s court.Officials allege Khan played a central role in a scheme that involved undervaluing luxury car imports to avoid paying duties, causing an estimated loss of Rs 25 crore to the exchequer.Investigators say the cars were sourced from countries such as the United States and Japan, rerouted through Dubai and Sri Lanka, and modified from left-hand to right-hand drive to meet Indian road requirements.

Forged documents were allegedly used to declare a much lower value—sometimes as little as half their actual cost—enabling massive tax evasion.The DRI claims that Khan personally brought in eight such vehicles, resulting in a customs duty shortfall exceeding Rs 7 crore. His firm, Car Lounge, is located in Hyderabad’s Gachibowli area, directly across from the Cyberabad Police Commissioner’s Office.The probe has so far identified over 30 luxury vehicles implicated in the case, including high-end models such as the Hummer EV, Rolls-Royce, Cadillac Escalade, Lexus, Toyota Land Cruiser and Lincoln Navigator. Authorities say the scam has a pan-India footprint, with links to importers operating out of cities including Mumbai, Pune, Bengaluru, Ahmedabad, and Delhi.Three companies linked to Khan—CLFIVE Automotives Private Limited, BAK Carlounge Services Private Limited, and BAK Car Lounge Private Limited—are also under scrutiny. According to DRI officials, many of the cars were allegedly imported on behalf of affluent clients, who are now part of the investigation.When TOI reached for comment, a senior staff member at Car Lounge claimed ignorance, saying, “We were told Khan is in Dubai. We don’t have any information about this arrest.”The DRI has indicated that the investigation remains active, and further arrests and asset seizures are expected in the coming days.