Hyderabad: A major luxury car smuggling operation has been uncovered by the Enforcement Directorate (ED) in 2025. The investigation targeted SK Car Lounge and its owner, Basharat Ahmed Khan, in Hyderabad.
The inquiry revealed a vast network of smuggling routes, high-profile clients, and customs fraud, causing the government to lose tens of crores.
On September 26, 2025, ED officers raided Khan’s home in Jubilee Hills and his business in Gachibowli, a hub for luxury car sales. They also searched properties linked to Khan’s family and associates in Hyderabad and Hakeempet. Investigators found import ledgers, conversion invoices, and a list of “VIP” buyers. Initial findings show a customs loss of Rs seven crore, but the total fraud could reach Rs 100 crore as more evidence emerges.
Khan is now in judicial custody. The ED, with the Directorate of Revenue Intelligence (DRI) and customs, continues to search properties and question those involved. They are cross-referencing vehicle records, tax filings, and payment trails with import documents from Dubai, Sri Lanka, and Indian ports.
The case took an interesting turn with the discovery of several prominent buyers, including Shailima Kalavakuntla, wife of former minister KT Rama Rao, Mohammed Sarib Rasool Khan, founder of Ayaan Educational Society, and various politicians and VIPs.
The investigation began when intelligence officer Susheel Choudhary received a tip about luxury car import misdeclarations linked to SK Car Lounge. The DRI found cars imported at nearly half their true value using false documents. In May 2025, Khan was arrested in Surat and taken to a special court in Ahmedabad for customs duty evasion totaling Rs 100 crore.
The smuggling ring used global trade routes, acquiring cars from the United States and Japan, then rerouting them through Dubai and Sri Lanka. There, cars were converted to right-hand drive for India. Fake invoices reduced their customs value. So far, about 30 cars, including Rolls-Royce, Lexus, Toyota Land Cruiser, Lincoln Navigator, Cadillac Escalade, and Hummer EV models, have been identified.
During questioning, Khan admitted to undervaluing certain models, such as the Toyota Land Cruiser 300 by Rs 20 lakh, the Rolls-Royce Cullinan by Rs 1.24 crore, and the Lexus LX-500D by Rs 50 lakh. Khan has offered to pay the differential duties on eight cars under investigation.
Aside from sales, Khan also lent these luxury cars to influential figures for events, often using cash transactions to avoid taxes. Investigators are examining political connections, though most involved deny any wrongdoing.
What started as a small tip has grown into a national scandal, involving politicians, business leaders, and cross-border networks in the luxury car smuggling scheme.
