DRI busts ₹30 cr duty evasion racket in luxury furniture imports

Directorate of Revenue Intelligence (DRI) officials, in their raids across multiple locations, including business premises, warehouses, offices of freight forwarders, customs brokers, and associated entities, have uncovered a complex, intertwined network used for massive undervaluation and misdeclaration of branded luxury furniture operating across multiple jurisdictions. The scheme involved the use of dummy importers (IEC holders), local intermediaries, overseas shell entities, and fabricated invoices, the Ministry of Finance said in a statement, adding that three individuals have already been arrested by DRI under provisions of the Customs Act, 1962.

The investigation conducted thus far revealed that branded luxury furniture was being directly sourced by the 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 by 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 the 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 to be in complicity and close conspiracy in executing the entire modus operandi.

Earlier in May 2025, another such case was 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 to evade customs duties. This case also involved duty evasion exceeding ₹20 crore, resulting in the arrest of three individuals. 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.