Preliminary findings indicate a gross undervaluation of 70% to 90% of actual transaction value, resulting in estimated customs duty evasion of approximately ₹30 crore

In a significant enforcement action, the Directorate of Revenue Intelligence (DRI) has busted a sophisticated, well-orchestrated customs fraud in imports of premium luxury furniture.

Acting on specific intelligence, DRI officials conducted searches across multiple locations, including business premises, warehouses, offices of freight forwarders, customs brokers, and associated entities. The investigation has exposed a complex, intertwined network used for massive undervaluation and misdeclaration of branded luxury furniture operating across multiple jurisdictions, involving the use of dummy importers (IEC holders), local intermediaries, overseas shell entities, and fabricated invoices.

The investigation conducted thus far revealed that branded luxury furniture was being directly sourced by beneficial importer from reputed Italian and other European suppliers, invoicing was being done in the names of shell companies based in jurisdictions such as Dubai. In parallel, fabricated invoices were obtained through a Singapore-based intermediary in the names of dummy importers falsely declaring the goods as unbranded furniture at significantly undervalued rates to Customs. Once cleared through Customs, the goods were transferred on paper to the intended beneficial owner via a local intermediary created for this purpose, while the goods were directly sent to the customer on the instructions of beneficial owner.

Preliminary findings indicate a gross undervaluation of 70% to 90% of the actual transaction value, resulting in estimated customs duty evasion of approximately ₹30 crore. The beneficial owner, the dummy importer, and the intermediary have been found in complicity and close conspiracy for executing the whole modus operandi. On 21 and 22 July 2025, all three individuals were arrested by DRI under provisions of the Customs Act, 1962.

Earlier in May 2025, another such case unearthed by DRI exposing a similar modus operandi involving the undervaluation of luxury furniture imports, using a front company, which was controlled and managed by another entity for evading customs duties. This case also involved duty evasion exceeding ₹20 crore, resulting in arrest of three individuals involved.

DRI continues to probe deeper into the wider network of shell companies, dummy IECs, masterminds and beneficial owners, and financial flows involved in these operations.

The DRI has stepped up its efforts in exposing such commercial frauds, which not only result in significant losses to government revenue but also create market distortions and an uneven playing field for compliant importers and domestic manufacturers.

Undervaluation schemes in luxury imports prompt enforcement action and arrests for customs duty evasion and collusion. Large-scale import fraud involved systematic undervaluation and misdescription of luxury furniture through dummy importers, overseas shell entities, fabricated invoices and local intermediaries to evade customs valuation and duties. DRI searches uncovered collusion among beneficial owners, intermediaries and dummy IEC holders, leading to arrests under the Customs Act, 1962 and ongoing investigation into the wider network and financial flows.