Section 285BA read with Rule 114E – Payment exceeding the specified amount in respect of credit card(s)
Issue/Justification
Currently, every bank/any other company or institution issuing credit card is required to report through Form No 61A, data related to all persons making payment exceeding the specified amount in respect of one or more credit cards issued to that person.
Specifically, Rule 114E(2), inter alia, provides that payments made by any person of an amount aggregating to—
(i) one lakh rupees or more in cash; or
(ii) ten lakh rupees or more by any other mode, against bills raised in respect of one or more credit cards issued to that person, in a financial year needs to be reported. A Large number of banks/other institutions operating in India issue credit cards. Reporting all such transactions through Form No 61A becomes a time consuming task for such banks/institutions who also have to comply with other requirements like TDS returns etc. Banks have to put in lot of efforts to provide such type of data as the data needs to be compiled first as it is not readily available.
Credit card transactions are done through payment gateway services provided by certain vendors. As of now, there are 4 payment gateway service providers as follows:
1. Visa
2. Mastercard
3. RuPay
4. American Express (AmEx)
Since all the transactions through credit card are recorded/processed by the above mentioned vendors, it would be easier for them to provide the required information more accurately and in a timely manner. It would also help the department to scrutinize such information using the latest information technology tools.
In case the information is called from payment gateways rather than banks, it will reduce the workload on banks and they can concentrate on their core services related to banking. Further, if some lesser number of entities can report such requisite data, it would be easy for both the AIR information provider as well as the government to control and utilize the data/information.
Suggestion
It is suggested that the information provided through Form No 61A w.r.t credit card payments exceeding the specified amount as per Rule 114E(2) currently provided by banks be provided by Payment Gateway service providers (i.e. visa, master card, RuPay, American express) by making a suitable amendment in the Act/Rule.
