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Noida police arrest prime suspect in ₹10,000 crore GST fraud

The suspect has been identified as Vikas Dabas, a resident of Mubarikpur in Delhi, said Shakti Avasthy, deputy commissioner of police (crime) who is leading the investigation into the case

A 29-year-old man was arrested on Monday for his alleged involvement in ₹10,000-crore GST (goods and services tax) fraud that involved registering thousands of bogus firms using stolen or fake identities, and using them to raise e-way bills and avail of input tax credit (ITC) from the government, the Noida police said on Tuesday.

Last June, the Noida police uncovered the alleged scam with the arrest of eight suspects and seized a list of over 3,000 bogus companies, registered on the basis of fake PAN card details, said police officers.

These fake companies were then used to generate e-way bills (GST related receipts for transporting consignments), officials said. With the latest arrest, the number of those held in connection with the scam is now 30, they added.

The suspect has been identified as Vikas Dabas, a resident of Mubarikpur in Delhi, said Shakti Avasthy, deputy commissioner of police (crime) who is leading the investigation.

“Dabas’ name had come to light ever since the first arrests had been made as he is one of the prime suspects associated with the gang. He had been committing the fraud for the last five years by obtaining GST rebates using fake bills prepared by establishing bogus firms with a GST number. Other members of his gang were arrested earlier,” the officer said.

Dabas used to also recruit more people into the gang, the DCP said, adding: “Together they would create fake documents like Aadhaar card, PAN card, rent agreement and electricity bills, which were used to create these bogus firms with GST numbers.”

He was also involved in selling these firms to those looking to get a GST rebate, thereby causing loss to the government to the tune of thousands of crores, said the officer.

Last October, Noida police declared a reward of ₹25,000 on Dabas’ arrest as he had been absconding since when the gang was busted.

“Dabas had been evading police arrest by frequently changing his location across the country. On Monday, the police finally caught him when he visited his residence in Delhi. He was remanded in judicial custody on Tuesday,” said the officer.

The suspect has been booked under Indian Penal Code sections 420 (cheating), 467, 468 and 471 (all related to forgery), 120 B (party to criminal conspiracy), police said.

Last week, the Noida Police also attached properties worth ₹5 crore of two suspects involved in the scam who remain absconding. The attachment was made under section 83 (Attachment of property of person absconding) of the Criminal Procedure Code (CrPC).

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Union Finance Minister Smt. Nirmala Sitharaman interacts with start-up and fintech ecosystem stakeholders

Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman chaired a meeting with Start-up and FinTech Ecosystem Entities, in New Delhi, today.

The meeting was also attended by Union Minister of State for FinanceDr Bhagwat Kishanrao Karad; Dr Vivek Joshi, Secretary, Department of Financial Services (DFS); Shri Rajesh Kumar Singh, Secretary, Department for Promotion of Industry and Internal Trade (DPIIT); Shri S. Krishnan, Secretary, Ministry of Electronics and Information Technology (MeitY); Shri. T. Rabi Sankar, Deputy Governor, Reserve Bank of India (RBI); Founders/Co-Founders/MDs/CEOs/Heads of various Start-ups and Fintech companies and various Associations such as Fintech Association for Consumer Empowerment (FACE), Digital Lenders’ Association of India (DLAI), Payment Council of India (PCI), and Fintech Convergence Council (FCC).

The interaction with the Start-up and Fintech ecosystem partners was organised to enable free exchange of ideas to bolster and scale upoperations to facilitate global competitiveness by enabling growth in the Fintech sector. India has approximately 10,244 Fintech entities, which is 3rd largest in the world.

The Union Finance Minister noted the rapid growth of the Start-up and Fintech sector of India, especially in the last decade, and welcomed suggestions from the FinTech leaders to achieve greater Easeof Doing Business and Ease of Living for consumers.

During the deliberations, Smt. Sitharaman exhorted the regulators, including RBI, that they may hold meetings via virtual mode once a month to discuss any questions/queries/concerns of the startups and fintech companies.

During the meeting, it was emphasised that innovative solutions by the Fintech companies are essential to the financial services sector while ensuring strict compliance with regulations.

It was noted that Aadhar, UPI, API Setu among others have acted as enablers for Start Up and FinTech organisations and simplified incorporation of companies, recognition of P2P Lenders as Non-Banking Financial Companies (NBFCs), regulatory sandbox, Fintech repository, SRO Framework for Fintech, etc have facilitated the startup eco-system in India.

The startup and fintech entities appreciated the processes, regulations and efficacy of GIFT City and the IFSCA and noted that they are creating new opportunities for the startups and fintechs.

The number of Start-ups in India have grown significantly from just over 300 in 2016 to over 1.17 lakh in 2023 as recognised by DPIIT, generating more than 12.4 lakh jobs, and 47% of the Start-ups have at least one Women Director. Additionally, India is the home to over 10,000 Fintech companies working in diverse sectors and segments. The Union Finance Minister also noted that India’s Fintech ecosystem is the 3rd largest in the world and growing at 14% CAGR and that RBI recently floated a draft Framework for recognition of Self-Regulatory Organisation (SRO) for the Fintech sector for stakeholder’s consultation.

The following key action points emerged from the deliberations:

  • DFS to conduct a day-long workshop with Law Enforcement Agencies (LEAs) wherein fintech ecosystem partners can voice theirissues/concerns.
  • DPIIT mentioned that new patent examiners have been added which will reduce the turn-around-time of patent applications.
  • Cost of lending/funding for critical areas including priority sector should be rationalised.
  • Simplification and digitisation of KYC across all fintech segments.
  • RBI, DPIIT and MoF to look at the change of ownership holding/control of listed fintech companies to enable them to be in-sync with regulatory compliance.
  • Issues pertaining to cybercrime will be suitably addressed in the new Digital India Act.

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