The Directorate of Revenue Intelligence (DRI) has unearthed a scam involving the import of luxury vehicles. DRI has found out that the gang of people doing the scam imported 20 vehicles to India and evaded tax of more than Rs 25 crore by using diplomats’ name.
DRI has arrested three people including Nipun Miglani, CEO of Big Boy Toyz, which is a luxury car dealership for new and used vehicles. DRI launched “Operation Monte Carlo” after they received the information from its sources that a group of people are importing high-end luxury cars to India. The gang used the names of various diplomats stationed in India to evade paying the tax. Then they used to sell the vehicles and charged them the full amount including the tax that they did not pay.
Importing a foreign-made vehicle in India has a heavy-tax regime. Every citizen needs to pay customs duty on all the imported items. The Regulation of Customs Privileges Rules, 1957, the net Customs duty on the import of an automobile is a staggering 204%. It means that if you import a completely built unit of any automobile including motorcycles and cars to India, you will need to pay 204% Customs duty on the value of the vehicle. This makes CBU models almost three times more expensive in India.
Interestingly though, international diplomats stationed in India and their families do not require to pay the Customs duty to import the vehicles.
How DRI caught the scam?
DRI started the investigation after a luxury car got imported in the name of an African diplomat, who is stationed at the national capital – New Delhi. The DRI kept a close eye on the car and remained discreet all through the process.
The officials of DRI noticed that after the vehicle arrived at the port, some people loaded it in a truck and drove it to a showroom in Andheri, Mumbai. The vehicle was put on display in the showroom. While tracking the vehicle, DRI simultaneously carried out searches at the homes of key individuals involved in the racket. The racket was operating in seven Indian cities.
DRI seized six vehicles including a Toyota Land Cruiser, Range Rover and other vehicles. The DRI says that they have identified more vehicles and are currently working to locate these vehicles.
How did the scam happen?
The mastermind of the scam is a Dubai-based individual who has a record of getting involved in Customs offences. DRI has investigated him previously too. The individual arranged the import of the vehicles from the United Kingdom, Japan and the United Arab Emirates.
Nipun Miglani, who was working as CEO of BBT identified the potential customers of these vehicles. Once the vehicles landed in India, they were sent straight to the city of the buyer or a dealer of luxury cars.
These vehicles even got registered in different states like Maharashtra, Himachal Pradesh and Punjab. After registering the cars, they used to charge the full amount from the customers including the 204% Customs duty that they never paid. This ensured massive profits. DRI has estimated that the racket has made about Rs 25 crores from 20 cars.
BBT fired its CEO
Soon after the scam became public, Big Boy Toyz announced that they have fired the CEO Nipun Miglani. The luxury pre-used car dealership clarified that they do not have any role in the scam and BBT is not involved in this.
Mr Jatin Ahuja, Founder, Big Boy Toyz stated,
Big Boy Toyz, in last 10 years haven’t been associated with any import or export of Luxury cars. We only deal within India and as an organization weren’t involved in any kind of illegal practices by Mr Nipun Miglani via the organisation. Please note any illegal activities done by Mr Miglani is carried on in his personal capacity. The stated allegations were exercised by Mr Miglani outside the organization and beyond office hours. BBT wasn’t aware of any such practices and as soon as we were intimated about the same, we terminated his employment and association with the organization effective immediately. Our legal team is also working towards taking the necessary actions”