Six Times Indian Celebrities Were Involved In Luxury Car Tax Evasion Cases

Modified On Jul 30, 2021 10:51 AM By CarDekho for Rolls-Royce Ghost 2009-2020

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The high custom duties on imported cars have led many film and sports stars to evade some of these taxes

Tamil actor Vijay breathed a sigh of relief when the Madras High Court (HC) waived off a Rs 1 lakh fine that was slapped on him recently. The veteran actor had appealed in 2012 for an exemption from a Rs 40 lakh entry tax for his Rolls Royce Ghost, but the court has ordered him to pay the amount. He’s one of many famous people in the limelight that have got into trouble with the police for having an expensive luxury car. Tax laws and duties differ from state to state in India, and here are some celebrities who allegedly tried to circumvent the rules: 

Fahadh Faasil

In 2017, the Malayalam actor was arrested and later released on bail in Kerala. Allegedly, his Mercedes-AMG E63 sports sedan was registered in the Union Territory (UT) of Pondicherry, even though he lived in Kerala. Reports say that the critically acclaimed actor, known for films such as Kumbalangi Nights, has paid Rs 19 lakh towards court-obligated payments. 

Amala Paul

This Malayalam actress also lives in Kerala. She had bought a Mercedes Benz S-Class in Bengaluru in 2017, but got it registered using a rented address in Pondicherry, saving almost Rs 19 lakh by evading Kerala’s higher registration fees and road taxes. The actress claims that the car was mostly driven outside of Kerala, but she surrendered to the authorities in 2018 and paid the fines and taxes applicable. 

Danny Denzongpa

This veteran Bollywood actor had his Range Rover registered in his home state of Sikkim. Since he now lives in Mumbai, the authorities in Maharashtra had reprimanded him in 2017. He had to pay nearly Rs 30 lakh in fines and fees. 

Suresh Gopi

The veteran Malayalam actor has been in the business since the ‘80s, and now is a nominated member of the Rajya Sabha, the upper house of the Indian Parliament. Despite his political status, Suresh Gopi was pulled up by the law for two of his Audis that had been registered in Pondicherry. The first case was reported in 2017 around the same time as Amala and Fahaad’s cases, and the second report was released in 2020. In total, the Crime Branch alleged that Gopi had evaded nearly Rs 20 lakh in taxes and fees. 

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Saif Ali Khan 

Saif acquired a Toyota Land Cruiser in 2004, but it was imported under the Transfer of Residence rule that allows an overseas Indian who is moving back to India to bring their car back to India without paying customs duty. Saif made the payment through someone who was moving back to India from Dubai. However, the Enforcement Directorate (ED) alleged that the buyer couldn’t have been able to afford a brand-new Land Cruiser in Dubai, and then traced the payment back to the well-known Bollywood actor. For evading a customs duty of Rs 30 lakh, Saif had to pay Rs 90 lakh in total fees and penalties. 

Sachin Tendulkar 

Thankfully, Sachin was never reprimanded for his cars. In 2002, he matched the long-standing record of the iconic Australian cricketer, Sir Donald Bradman, by scoring his 29th century in a test match. He was invited to Ferrari’s paddock at the Silverstone race track in the UK, where Michael Schumacher himself handed Sachin the keys to a new Ferrari 360 Modena. The staggering significance of that historical moment has only grown with time, but there was an outrage in India at the time since he was exempted from paying the 150 per cent import duty of around Rs 1.13 crore to bring his gift into India. 

Mahendra Singh Dhoni 

Around 2009, MS Dhoni bought himself a GMC Hummer H2 SUV that had to be imported from the US. The transport officer responsible for issuing the registration certificate accidentally put in the model of his car as a ‘Mahindra Scorpio’, possibly because the H2 wasn’t in the government’s database at the time. The error and subsequent loss of Rs 3.5 lakh in registration fees and tax were discovered seven years later. Dhoni didn’t just have to pay the remainder of the tax amount, but also a penalty.

Why Do Some People Try To Circumvent The Rules? 

Import laws have long been a thorn in the side of petrolheads in India. The few people who can afford to buy luxury and sports cars have to contend with ever-changing rules and, currently, a hefty 100 per cent customs duty. Add to that the registration fees (between 10-20 per cent for different states), insurance and other charges, and the price of the car gets inflated to more than twice its original cost of purchase. 

In the past, it cost almost 10 times less to register a car in Pondicherry instead of Mumbai, and all you needed was a temporary address. That’s why celebrities often got their cars registered there instead of their state of residence. Now, the gap between Mumbai (where the tax has been capped at 20 per cent) and Pondicherry registrations is almost non-existent, although differences between other states do exist. Although registration fee evasion has led to arrests even among the rich and famous, it is undoubtedly a small overhead when compared with custom duties that still cost as much as the car you’re importing, and have historically cost even more.

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In conclusion, Indians pay much more than people in first world countries for exotic brands such as Lamborghini, BMW and Roll-Royce. Lower taxes on cars can surely bring some much-needed diversity into the Indian market. It could even allow some of our favourite cars, such as the Porsche 911 and the Ford Mustang GT, to depreciate to a point where more people can buy and drive them. In these times when irreparable climate change is looming on the horizon, it could even be the right way forward to improve EV and hybrid car adoption in the country.

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