A Tehelka SIT report reveals how private vehicles are being used as taxis across India, helping operators evade taxes, causing massive revenue losses to the exchequer, while exposing passengers to legal, financial and insurance risks. ः-
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Most people in India hire taxis to travel from one place to another without knowing that the cab they are travelling in may be involved in a major tax fraud. Travel agents and taxi operators across the country are allegedly running this racket, sometimes with the knowledge and participation of passengers.
Kavita, a working professional, has been commuting to her office every day in a private hire taxi for the past three years. She had no idea that the taxi she regularly used was operating illegally and contributing to a tax fraud that costs the government crores of rupees. She learnt about it only after a friend told her that the taxi she had hired was illegal.
The illegal taxi business is not new in India and has long been associated with large-scale tax evasion. Yet, this issue has never been investigated and reported in depth before. In the public interest, Tehelka decided to expose what it believes is a major scam. In some cases, passengers travelling in these illegal taxis are allegedly hand in glove with taxi owners to conceal the wrongdoing. Although several government agencies conduct checks to catch illegal taxis on the roads, they often fail to identify the offenders. This Tehelka investigation, however, has gathered evidence pointing to widespread use of illegal taxis on Indian roads, allegedly resulting in tax fraud worth crores of rupees.
Tax fraud through illegal taxis has continued in India for years, with successive governments unable to curb the practice, costing the exchequer crores of rupees. The fraud typically involves using private vehicles with white number plates for commercial purposes, which is illegal across India. Such use violates the Motor Vehicles Act, attracts heavy penalties and can void insurance coverage. In many cases, owners attach their private vehicles to popular ride-hailing platforms or local transport networks to avoid commercial permit fees and taxes. If caught by transport authorities, these vehicles can be impounded, leaving passengers stranded.
Some taxi owners operate vehicles with private number plates (white plates) instead of commercial number plates (yellow plates) primarily to cut operating costs, reduce administrative compliance and avoid stricter regulations. While this practice operates in a legal grey area in some situations and is outright illegal in others, it remains widespread because of the financial benefits it offers.
Commercially registered vehicles (yellow plates) are subject to higher road taxes, permit fees and other government charges, whereas private vehicles are taxed at much lower rates. Commercial taxis must also undergo regular fitness inspections by Regional Transport Offices (RTOs) to remain roadworthy, while private vehicles face fewer compliance requirements, saving owners both time and maintenance costs. Drivers of white-plate vehicles also tend to face less scrutiny at state borders and traffic checkpoints, as enforcement agencies generally focus on commercial vehicles.
Using a private vehicle for commercial purposes is a violation of the Motor Vehicles Act. If caught, owners can face heavy penalties, and their vehicles may even be impounded. In addition, private motor insurance policies become invalid if the vehicle is being used commercially, leaving owners and drivers fully liable in the event of an accident or passenger injury.
Despite these legal risks, the practice remains widespread across India. According to people in the travel industry, a typical travel operator with a fleet of 20 taxis may have around 12 private vehicles and only eight commercially registered ones. Government agencies are also aware that many taxis operate without the required commercial permits and have periodically launched crackdowns against such vehicles. However, these enforcement drives have done little to deter operators, many of whom continue to run white-plate vehicles as taxis with little fear of being caught.
“If a private vehicle being used as a taxi meets with an accident, the owner can face legal action for operating a taxi without a permit. Passengers will also not receive any insurance claim because they were travelling in a private vehicle being used illegally as a commercial taxi,” said Guddu Khan, who has been driving taxis for a travel agent for several years and has transported passengers in private vehicles, speaking to Tehelka.
“When we carry passengers in a private vehicle, we brief them in advance. If transport department officials stop us for checking, we ask them to say that it is a friend’s or a relative’s car and not a taxi,” Guddu told Tehelka.
“During the Char Dham Yatra, there is a woman transport officer who sometimes asks passengers to take an oath with Ganga Jal that they are not travelling in a private vehicle being used as a taxi. Since many pilgrims do not want to lie, they tell the truth. I was once caught this way while carrying passengers in a private vehicle. My vehicle was seized and released only after I paid the required government charges,” Guddu said.
“I have the documents of a commercial vehicle, which show the number of taxes and fees that have to be paid. Passengers pay only the state tax. The remaining taxes are paid by the vehicle owner. That is why many operators use private vehicles as taxis to avoid these government taxes,” Guddu added.
“Sometimes when our private vehicles are caught being used as taxis, we have to pay a bribe of around Rs 10,000 to Rs 15,000. It has happened several times that my employer’s private vehicle was caught while operating as a taxi,” said Sunil Kumar, who has been driving taxis for a travel agent for several years.
“Before starting a journey in a private vehicle, we instruct passengers to tell transport department officials that it is their own private car if they are stopped for checking. But sometimes the passengers are from South India while the vehicle is registered in North India, and the officials realise they are lying,” Sunil added.
“I was once stopped by transport department officials while taking passengers from Gujarat to Haridwar in a private-registered Innova. Before they checked the vehicle, I told the passengers to say it was their own car and that they had only hired a driver for the trip. They said exactly that, and we were allowed to go,” said Dhanraj, another driver working for a travel agent.
“If the same private vehicle, with the same driver, keeps carrying passengers on the same route, there is a greater risk of getting caught by transport department officials. That is why I keep changing my vehicle,” Dhanraj added.
“I was once caught carrying passengers in a private vehicle. The officials demanded a bribe of Rs 30,000. I negotiated with them and eventually paid only Rs 500 before being allowed to leave,” said Shamshaad Pathaan, another driver working for a travel agent.
Tehelka’s investigation into the alleged taxi tax fraud began with Guddu Khan, who has worked as a driver for a travel agent for several years. By his own account, before joining the travel business, he worked as the driver of the personal assistant to a senior politician. Guddu alleged that many travel agents operate private vehicles with white number plates as commercial taxis to avoid taxes and regulatory requirements. According to him, commercially registered taxis require permits, multiple documents, tax payments and regular compliance, whereas private vehicles do not, making them a cheaper option for operators seeking to evade these obligations.
Reporter: Ye commercial gaadi aur private gaadi mein kya antar hai?
Guddu: Jaise?
Reporter: Ye taxi wale commercial gaadi na bhejkar private bhejte hain?
Guddu: Tax bachta hai. Commercial gaadi har koi leta nahi hai na.
Reporter: Kyun?
Guddu: Ismein tumhare 3 kagaz ho gaye. Ye poori file hai. Insurance le, road tax le.
Reporter: Commercial gaadi mein?
Guddu: Haan. Duniya bhar ke kagaz hote hain.
Reporter: Taxi wale ko dikkat kya hai commercial gaadi dene mein?
Guddu: Bas ye dekh lo. Kagaz hote hain. Tumhe kagaz dikha doon… policy… ye dekho kitne ho gaye… 4-5… 6, 7, 8… 9, 10, 11… itne kagaz hote hain iske.
[Guddu’s remarks suggest that the decision to use private vehicles as taxis is driven more by saving money than by convenience. The exchange also indicates how avoiding permits and mandatory paperwork may have become a common practice despite the legal risks.]
In the following chat, Guddu explains that using private vehicles as taxis can have serious legal and financial consequences if an accident occurs. According to him, using a private-registered vehicle as a taxi is illegal because it amounts to operating a commercial taxi without the required permit. He claimed that foreign tourists generally prefer commercially registered vehicles because they are covered by insurance. In the event of an accident, passengers travelling in such vehicles can claim insurance. However, Guddu said that if an accident occurs in a private vehicle being used as a taxi, the owner could face legal action for operating without a permit, while passengers may not receive any insurance compensation.
Reporter: Lekin tourist to commercial gaadi leta hai, bahar ka videshi?
Guddu: Angrez kyun leta hai…kyunki unka bima hota hai.
Reporter: Bima hota hai matlab?
Guddu: Kai-kai crore ke bime hote hain in logon ke.
Reporter: Insurance?
Guddu: Khuda na khasta koi hadsa ho jata hai, to wo insurance company se claim kar sakte hain.
Reporter: Achha, taxi number gaadi par claim kar sakte ho, bima mil jayega?
Guddu: Agar private gaadi mein koi hadsa hota hai na, to maalik bhi jail jayega aur kuch nahi milega unko.
Reporter: Maalik kyun jail jayega?
Guddu: Private gaadi taxi mein jo chala raha.
Reporter: Achha, private gaadi taxi mein nahi chala sakte?
Guddu: Nahi… ye sab chori-chhipe chalate hain.
[In the above chat, Guddu explains why he believes commercially registered taxis are safer for passengers, especially foreign tourists. The exchange reminds us that choosing a properly registered taxi is not only about following the law but also about ensuring protection when something goes wrong.]
In the following conversation, Guddu explains how passengers are allegedly coached before travelling in private vehicles being used as taxis. He revealed that whenever he carried passengers in a private vehicle being used as a taxi, he would brief them in advance to avoid action by transport department officials. According to him, passengers were told that if stopped during checking, they should say the vehicle belonged to a friend or a relative and was not a taxi. Guddu further claimed that they even asked passengers to save the taxi owner’s phone number so they could provide it to officials if they were asked to contact the vehicle owner.
Reporter: Maan lo raste mein checking ho gayi RTO ki?
Guddu: Checking hoti nahi hai, aur ho to kagaz dikha do.
Reporter: Maan lo private gaadi mein koi savari ja rahi hai aur kahin checking ho gayi… phir?
Guddu: Wo show karega na, bhai, ki taxi nahin, gaadi ja rahi hai…
Reporter: Achha, usko saabit karna padega?
Guddu: Haan.
Reporter: Wo kaise saabit karega?
Guddu: Jaise tum gaadi mein ja rahe ho. Wo poochega, tumhari apni hai ya taxi. Ab ye tumhare par depend karega, tum apni bata rahe ho ya taxi bata rahe ho.
Reporter: Aur savari ne keh diya ‘taxi mein ja rahe hain’ ?
Guddu: To band kar denge gaadi.
Reporter: To savari ko sikha kar le jaate ho kya?
Guddu: Sab kuch batate hain. Plus, jiske naam gaadi hai, uska number phone mein save karvaya jaata hai.
Reporter: Jaise Naushad ki gaadi mein le gaye Nainital?
Guddu: Haan, to Naushad ka number save karwa denge.
Reporter: Tumne pehle diya hi nahi. Main Nainital gaya hoon.
Guddu: Route par jo dikkat aati hai na, wo hame pata hai.
[The chat throws light on how operators try to avoid detection during roadside checks. It suggests that avoiding checks may involve preparation well before the journey begins. It also reminds us that when people knowingly support such practices, they can end up helping conceal an illegal activity, even if unintentionally.]
Guddu told us that he was familiar with routes where transport department vigil is tight and where drivers using private vehicles as taxis are more likely to be caught. He recounted an incident during the Char Dham Yatra when, according to him, he was stopped while carrying passengers in a private vehicle being used as a taxi without a permit. Guddu disclosed that a woman Regional Transport Officer (RTO) would ask passengers to place Ganga Jal on their hands and take an oath that they were not travelling in a private vehicle being used commercially. He said many pilgrims, unwilling to lie during a religious journey, admitted the truth. Guddu claimed that his vehicle was once seized in this manner and released only after the required tax was paid. He further alleged that many taxi operators use private vehicles as taxis without permits because passengers pay only the state tax, while commercial vehicle owners have to bear several other taxes and compliance costs.
Reporter: Kaun-kaun se?
Guddu: Jaise Chaar Dhaam mein.
Reporter: Aur?
Guddu: Chaar Dhaam mein agar keh doge meri apni hai, tab bhi jhoothe saabit ho jaoge… kyunki wahan RTO lady hai. Bahut har* hai. Haath par Ganga Jal rakhkar kasam khilwati hai. Aur jo teerth yatra karne ja raha hai, kasam kaise kha le jhoothi?
Reporter: Aisa hua hai tumhare saath?
Guddu: Kai baar hua hai.
Reporter: Pakde gaye ho tum, bache kaise?
Guddu: Band kar di gaadi.
Reporter: Tumhari gaadi band ho chuki hai pehle?
Guddu: Haan.
Reporter: Driver ke saath kuch nahi hota?
Guddu: Nahi.
Reporter: Penalty to lagti hogi?
Guddu: Tax dena padta hai phir uska. Jaise 4 saal purani gaadi hai tumhari, tax bharo aur jao.
Reporter: To tumhe tax bharna pada?
Guddu: Haan.
Reporter: Matlab savari kabhi ghabra gayi aur usne bol diya taxi ki hai hamne, phir to darr gaye tum, phas gaye?
Guddu: Hum kyun phas gaye?
Reporter: Tax to dena padega?
Guddu: Maalik dega na tax.
Reporter: Ye to bahut saare taxi wale chala rahe hain private gaadi. Sab taxi mein chal rahi hain?
Guddu: Haan.
Reporter: Taxi walon ka ye fayda hai ki unka tax bach raha hai. Tax to tum savari se le rahe ho, phir kahan bach raha hai?
Guddu: State tax hi to de rahi hai. Government tax thodi de rahi hai savari. Fitness hui, road tax hua, wo thodi deti hai savari. Sab maalik ko dena padta hai.
[Interestingly, Guddu’s account shows that enforcement can sometimes rely as much on human honesty as official inspections. He explains how religious pilgrims, when confronted by officials, often admitted the truth, leading to vehicles being seized. The dialogue also suggests that attempts to avoid taxes may eventually prove more expensive when penalties and legal action come into play.]
According to Guddu, taxi owners with yellow number plates and permits have to maintain 12 different documents to operate legally. Since complying with these requirements is difficult, many owners instead use private cars with white number plates as taxis without permits. Guddu claims that permitted taxis are mainly used in only two situations: by companies that require GST invoices and by foreign tourists.
Reporter: Iske alawa kaun-kaun se tax hain?
Guddu: Saare tax hain. 12 paper hain iske.
Reporter: Aap keh rahe ho savari sirf state tax deti hai?
Guddu: Haan.
Reporter: Aur nahi deti, isliye aap taxi gaadi nahi bhejtey?
Guddu: Taxi gaadi do jagah jaati hai. Ya to foreigner (foreign tourist ke case mein) mein milegi, ya phir company mein. Wahan par (company mein) GST bill maangtey hain wo to usmein taxi number dikhana padta hai.
[Guddu links the use of private cars as taxis to the burden of complying with permit rules. His account suggests that some operators choose easier, though illegal, alternatives. A takeaway from this exchange is that complex compliance requirements can sometimes encourage rule violations.]
Guddu claimed that nearly 70 percent of travel agents in Punjab, Haryana and nearby states operated taxis without permits by using private vehicles. He also alleged that when such vehicles were caught, drivers often paid small bribes to police personnel to avoid action. The widespread use of such vehicles results in governments losing crores of rupees in taxes. He also points out the places where such vehicles are more likely to face checks.
Reporter: Lekin phir bhi saare private chala rahe hain taxi wale.
Guddu: Kam se kam 70 percent gaadi Punjab ki hai. Punjab, Haryana ki private number wali gaadiyan use ho rahi hain.
Reporter: Sab tax bachaney ke liye kar rahe hain, to government ka to nuksaan ho raha hai……kabhi koi police wala pakad leta hai, to tum le dekar chhoot jaate hogey?
Guddu: Haan, 1000-2000 le leta hai wo.
Guddu (continues): Haridwar gaye, Rishikesh ki taraf to dikkat ho sakti hai. Chaar Dhaam mein ho sakti hai. Punjab mein, Chandigarh mein dikkat hoti hai.
Reporter: Police wale bhaap letey honge ye private par taxi chal rahi hai.
Guddu: Haan… ye din raat ka kaam hai hamara. Chehre pehchan letey hain ye.
[Guddu alleges that illegal taxi operations continue despite regular police checks. He claims that bribes are often paid to escape penalties. Ironically, it emerges that weak enforcement can end up encouraging repeated violations instead of stopping them.]
After meeting Guddu, Tehelka spoke to another taxi driver, Sunil Kumar, who, like Guddu, has been working for a travel agency for several years. In this chat, Sunil Kumar says the travel agency where he works uses private vehicles to carry passengers. He said that whenever one of the agency’s private vehicles is caught operating as a taxi by the transport department, they have to pay a bribe of around Rs 10,000 to Rs 15,000. He also says this has happened on several occasions.
Reporter: Kisi din pakde gaye to?
Sunil: Dene padta hai, 10-15 hazar, jo bhi pade.
Reporter: Pakdi gayi (vehicle) hai kabhi?
Sunil: Pakdi gayi hai kai baar.
Reporter: Personal ko taxi mein chalate hue? ….aapke saath hua kabhi?
Sunil: Nahi, mere saath nahi. Main to taxi chalata hoon.
[Sunil’s account echoes Guddu’s claims about the alleged use of private vehicles as taxis. He says bribes are paid whenever such vehicles are caught. One thing that emerges from this exchange is that repeated violations can become routine when offenders expect to evade action.]
Sunil told Tehelka that before taking passengers on a tour in a private vehicle, they brief them to tell transport department officials that it is their own private car if stopped for checking. However, he said this story sometimes falls apart, especially when passengers are from South India while the vehicle is registered in a northern state. Sunil also claimed that when they are caught operating a taxi without a permit, they usually pay a bribe of around Rs 15,000 to Rs 20,000 to avoid further action.
Reporter: Savari ko sikha kar bhi le jaate hai ye?
Sunil: Haan, sikha kar… jaise aapko jana hai Himachal, to aapko bol denge ki bol dena, “Aapke dost ki gaadi hai.”
Reporter: Raaste mein koi pakde, to bata dein meri personal gaadi hai?
Sunil: Ab agar baar-baar usi prant mein jaayegi, to unko bhi pata pad jaata hai na kya hai… itna personal aadmi kaun hai jo baar-baar apni gaadi de raha hai.
Reporter: Kai baar savari darr ke bata deti hogi?
Sunil: Haan, bata deti hai… ab South ke aayenge, unki language alag hai na. Wo to haal samajh jayenge. Ab UP ka number hai, South ka baitha hai, to personal kaise ho jayegi gaadi?
Reporter: Pakde jaate ho, to 15-20 hazar dene hote honge. Gaadi seize bhi ho jaati hogi?
Sunil: Haan, kai baar.
Sunil (continues): Seize nahi karani, to paise dene padte hain.
Reporter: Koi imaandar mil jaata hoga, phir to seize karani padti hogi gaadi?
Sunil: Hmm.
[In the above dialogue, Sunil describes what he claims is a routine way of avoiding checks by transport officials. He says passengers are coached and, if that fails, bribe is paid to escape action. So, it emerges that when deception becomes part of the journey, enforcement loses much of its purpose.]
After speaking to Sunil, Tehelka met another taxi driver, Dhanraj, who also works for a travel agency and carries passengers in private number plate vehicles. Dhanraj admitted that he was once caught while taking five passengers from Gujarat to Haridwar in a private number plate Innova. He said he had already instructed the passengers to tell transport officials that it was their own private vehicle and that they had only hired a driver for the trip. According to Dhanraj, the passengers followed his instructions, and the officials let them go.
Reporter: Jo private gaadi aap taxi mein le jaate ho, to savaari ko to sikha kar le jaate honge?
Dhanraj: Purane aap jaise hi jaate hain, naye kahan milte hain.
Reporter: Maan lo…
Dhanraj: Haan, to police rokegi to bol denge, yaari dosti mein lekar aaye hain.
Reporter: Koi South Indian mil gaya, jisko bhaasha nahi aati?
Dhanraj: Unko ye nahi dete, phir taxi dete hain. South Indian bhi, Gujarati bhi, ye saaf Hindi nahi bol paata. Main bhi ek baar phas gaya tha.
Dhanraj (continues): Mein aap private gaadi taxi mein le ja rahe the. Unko pehle samjha diya tha. Par dekho, har aadmi aisa hota nahi. Upar wale ka mehar hota hai. Kuch ho jaaye, par mere saath nahi hua kuch. Wahan unhone maan liya.
Reporter: Kaunsi gaadi thi?
Dhanraj: Innova thi…kai gaadiyan hain iske paas.
Reporter: Savari kitni thi?
Dhanraj: Paanch savari.
Reporter: Kahan ki?
Dhanraj: Gujarat ki. Maine bola, thoda help karna padega aapko. Bole, koi nahi. Kyunki challan karenge, do-chaar ghanta barbaad karenge.
Dhanraj: Maine kaha, aapko itna bolna hai, “hum gaadi lekar aaye hain, driver hamara hai.” Main khada raha. Police wale ne licence manga, kaagaz dekhe. Kuch to aadmi ki shakal surat se pata chalta hai. Phir wo samaj gaya hoga, bola, “Jao.”
Dhanraj (continues): “Kahan ja rahe ho?” Maine kaha, Haridwar.
Reporter: Matlab usne pakda nahi, wo samjha nahi, taxi nahi samjha?
Dhanraj: Nahi.
[Dhanraj’s account suggests that convincing passengers to support a false claim is, according to him, part of the operators’ strategy. He says it worked in his case. The exchange shows that inspections can become less effective when they rely mainly on what travellers say.]
According to Dhanraj, the risk of getting caught increases when the same private vehicle repeatedly carries passengers on the same route. He says transport department officials eventually recognise such vehicles. That is why, according to Dhanraj, he keeps changing the vehicle he drives.
Reporter: Nahi, ek hi gaadi, ek hi driver, ek hi route par jaaye.
Dhanraj: Haan, tab pakda jaata hai. Wo pehchaan jaate hain, “Ye baar-baar aa raha hai, iska matlab iska card chal raha hai.” But aisa hota nahi. Agar hum hain, to hamari gaadiyan bhi to badalti rehti hain na. Usme nahi pakad paate.
[In the above chat, Dhanraj explains what drivers do to avoid attracting the attention of transport officials. He says officials recognise vehicles that appear repeatedly on a particular route. It emerges from this exchange is that consistent enforcement can make repeat violations harder to conceal.]
Dhanraj admitted that the widespread use of private vehicles as taxis causes significant tax losses to state governments. He claimed that many travel agents across different states operate private vehicles without permits. According to Dhanraj, this practice is common and followed by most operators in the business.
Reporter: Isme tax ka bada nuksaan ho raha hoga government ka, crores ka?
Dhanraj: Ho raha hai. Par har state mein 10-12 gaadiyan hain. Sab jagah 4-5 gaadiyan private chal rahi hain, aur anya jo hain, wo bhi.
Reporter: Sabhi chala rahe hain?
Dhanraj: Sabhi chala rahe hain.
[Dhanraj claims the practice is widespread and involves many travel operators across states. He also links it to significant tax losses for governments. The upshot from this exchange is that when violations become common, public revenue can suffer on a large scale.]
After Dhanraj, Tehelka met another taxi driver, Shamshaad Pathan, who was operating a taxi without a permit. He told Tehelka that he was once caught carrying passengers in a private number plate vehicle. According to Pathan, the officials demanded a bribe of Rs 30,000. He claimed he bargained with them and, in the end, paid just Rs 500 and was let off.
So, the Tehelka investigation exposed travel agents allegedly operating private vehicles as taxis in violation of transport rules. Such vehicles are not recognised by the transport department as commercial taxis and are, therefore, being operated illegally. Under commercial permit regulations, a vehicle used for commercial purposes must have yellow number plates.
Private car operators, however, hire out vehicles ranging from Wagon Rs and Innovas to Mercedes sedans, all bearing private registration certificates and driven by drivers using private driving licences. They typically charge for a minimum of eight hours or 80 km. These vehicles are available at most local taxi stands and through travel agents, allegedly causing governments to lose crores of rupees in taxes. During the investigation, several drivers also claimed that passengers are sometimes coached to mislead officials and that bribes are allegedly paid when such vehicles are caught, pointing to possible gaps in enforcement.
So, the next time you hire a taxi, first make sure it has a yellow number plate, which indicates that it is registered as a commercial taxi with the transport department. If you instead travel in a taxi with a plain white number plate and, unfortunately, meet with an accident, you may not receive the insurance or mediclaim benefits normally available, as such vehicles are registered as private vehicles. For your safety and legal protection, travel only in a taxi with a yellow number plate. If the vehicle has a white number plate, do not use it as a taxi.
