Gautam Singhania's JK Investors pays Rs 328 cr penalty in customs case

The DRI accused Raymond Group CMD Gautam Singhania of evading custom duties on the import of 142 vehicles, including 138 vintage cars

In a resolution to a case filed by the Directorate of Revenue Intelligence (DRI), the Gautam Singhania-led Raymond Group, through its unit JK Investors (Bombay) Ltd, has paid a penalty of Rs 328 crore, according to a report by The Economic Times (ET). The case, which alleged customs duty evasion, pertained to the import of 142 cars and was closed in January last year.

The DRI accused Raymond Group CMD Gautam Singhania of being the "beneficial owner" behind the import of 142 cars, including 138 vintage vehicles and four R&D vehicles, leading to a revenue loss of Rs 229.72 crore to the exchequer. The cars were allegedly undervalued and routed through intermediary companies in the UAE, Hong Kong, and the US.

While the closure report states that the payment includes differential duty, interest, and a penalty of 15 per cent, a Raymond Group spokesperson told ET that it was a case of "erroneous calculation", which was paid by JK Investors (Bombay), and the matter was closed.

According to the DRI, Singhania's alleged instructions led to the procurement of cars from auction houses like Sotheby's, Barrett-Jackson, and Bonhams. The vintage cars, purchased between 2018 and 2021, were sent directly to India but invoiced through companies in Dubai, the US, and Hong Kong to evade customs duty.

Singhania, expressing his fondness for vintage cars, mentioned plans to open a museum in Mumbai. The DRI contended that Singhania was fully aware of the actual values of the imported vintage cars but misdeclared them to evade proper customs duty.

During the probe, the DRI conducted searches on Raymond Group premises, including Singhania's residence. Email and chat records were retrieved, revealing the actual prices paid for the cars. The closure report states that employees handling vintage car procurement reported directly to Singhania.

Acknowledging the DRI's case, Singhania accepted responsibility for the customs duty shortfall. A Raymond Group executive stated that the loss to the exchequer was less than the mentioned amount, attributing it to a case of miscalculation rather than an intentional attempt to evade taxes.

In March 2022, the Raymond Group made a voluntary payment of dues, seeking closure of proceedings. Customs commissioner Sonal Bajaj, last year, upheld DRI's findings, granting closure of proceedings under Section 28(6) of the Customs Act, 1962.