CBDT vide Notification 105/2019 and Circular 32/2019 dated 30.12.2019 has prescribed 3 Electronic Modes for accepting payment by person having total sales, turnover, total gross receipts of more than Rs. 50 Crore as mentioned in Section 269SU which governs ‘Acceptance of payment through prescribed modes’.
Provision applicable from 1st January, 2020 (Rule 119AA) prescribes the following e-payment modes:
a) Debit Card powered by Rupay
b) Unified Payments Interface (UPI) – BHIM-UPI
c) UPI QR Code
Penalty for non-compliance – Rs. 5,000/day
No penalty under Section 271DB, if the person installs and operationalizes the facilities on or before 31st January, 2020.
So, the businesses, firms, shops get a final 1 month time to go digital and save themselves from shelling out hefty fines!!
Circular No. 32/2019
Government of India
Ministry of Finance
Department of Revenue
Tax Policy Division
Central Board Of Direct Taxes
New Delhi
********
Dated: December 30, 2019
Sub.: Clarifications in respect of prescribed electronic modes under section 269SU of the Income-tax Act, 1961 – reg.
In furtherance to the declared policy objective of the Government to encourage digital economy and move towards a less-cash economy, a new provision namely Section 269SU was inserted in the Income-tax Act, 1961 (“the Act”), vide the Finance (No. 2) Act 2019 (“the Finance Act”), which provides that every person having a business turnover of more than Rs. 50 Crore (“specified person”) shall mandatorily provide facilities for accepting payments through prescribed electronic modes. The said electronic modes have been prescribed vide notification no. 105/2019 dated 30.12.2019 (“prescribed electronic modes”). Therefore, with effect from 01st January, 2020, the specified person must provide the facilities for accepting payment through the prescribed electronic modes. Further. Section 10A of the Payment and Settlement Systems Act 2007, inserted by the Finance Act, provides that no Bank or system provider shall impose any charge on a payer making payment, or a beneficiary receiving payment, through electronic modes prescribed under Section 269SU of the Act. Consequently, any charge including the MDR (Merchant Discount Rate) shall not be applicable on or after 01st January, 2020 on payment made through prescribed electronic modes.
2. In this connection, it may be noted that the Finance Act has also inserted section 271DB in the Act, which provides for levy of penalty of five thousand rupees per day in case of failure by the specified person to comply with the provisions of section 269SU. In order to allow sufficient time to the specified person to install and operationalise the facility for accepting payment through the prescribed electronic modes, it is hereby clarified that the penalty under section 271DB of the Act shall not be levied if the specified person installs and operationalises the facilities on or before 31st January, 2020. However, if the specified person fails to do so, he shall be liable to pay a penalty of five thousand rupees per day from 01st February, 2020 under section 271DB of the Act for such failure.
[F.No.370142/35/2019-TPL]
(Ankur Goyal)
Under Secretary to the Govt. of India
Author Bio
CBDT has issued Circular no. 16/2020 on 30th August, 2020 advising banks to immediately refund the charges collected, if any, on or after 1st January, 2020 on transactions carried out using the electronic modes prescribed under section 269SU of the Income-tax Act,1961
Banks are also advised not to impose any charges on any future transactions carried through these prescribed modes.
Circular 12/2020 grants relief from this compliance if “specified person” has only B2B transactions and atleast 95% sales are non-cash
What is the procedure to notify the I.T. department ut the installation and operativeness of the facilities?
we are an exporter. we have all our shipments done and the payments are recd. by our banker directly to our bank against the payment done by our customer from the overseas countries. so it is already online payment through bank. Do we also require to the QR code to affixed on our commercial invoices issued in US dollars.
Is it necessary to provide all three facilities?
Is it necessary to provide all three facilities?
POS machine is mandatory for manufacturing units as well? Yes we fall under he bracket of turnover more than Rs. 50 Crores.
We have already complied with QR Code and UPI, is it necessary for POS machine?
is it prohibit to get cash payment below 10K in due course of business. please advise as we have petrol pump where all transaction in digital mode is not possible…
Whether this section 269SU is applicable on NBFC finance company which accept all payment through RTGS,NEFT,IMPS only. there is only large amount transaction i think upi does’t support large transaction. Please reply
Hi, please confirm these act is applicable for Business to Business collection or for Consumer/End User/ Customer to Company collection
Do exporters, export invoices are also included by this payment mode.
Is this for B2B also.
Thanks for the reply
Definition of “Specified Person” needs clarification