Finance Minister exempts B2B firms from using only BHIM, RuPay for accepting payments
- The finance ministry on Wednesday exempted companies with a turnover of over ₹50 crore and involved in only B2B transactions from the requirement of accepting payments only by electronic modes like RuPay or BHIM-UPI.
- “It is clarified that the provisions of Section 269SU of the Act shall not be applicable to a specified person having only B2B transactions (i.e. no transaction with retail customer/consumer) if at least 95% of aggregate of all amounts received during the previous year, including amount received for sales, turnover or gross receipts, are by any mode other than cash,” the CBDT said in a circular.
- To encourage digital transactions and move towards a less-cash economy, the government inserted a new provision, Section 269SU, in the Finance Act, 2019, requiring a person carrying on business and having sales/turnover/gross receipts from business of more than ₹50 crore in the immediately preceding previous year to mandatorily provide facilities for accepting payments through prescribed electronic modes.
- In December 2019, debit card powered by RuPay; Unified Payments Interface (UPI) (BHIM-UPI); and Unified Payments Interface Quick Response Code (UPI QR Code) were notified as prescribed electronic modes.
- The Central Board of Direct Taxes (CBDT) said it has received representations stating that the requirement of mandatory facility for payments through the prescribed electronic modes is generally applicable in B2C (business to consumer) businesses, which directly deal with retail customers.
- The prescribed electronic modes have a maximum payment limit per transaction or per day they are not so relevant to the B2B (business-to-business) businesses, which generally receive large payments through other electronic modes of payment such as NEFT or RTGS.
- Nangia Andersen Consulting Director Shailesh Kumar said that since non installation of such payment facility attracted a significant penalty of ₹5,000 per day, many businesses were in doubt and were forced to install such payment facilities, even though such facilities (typically used by individual customers mostly) were never supposed to be used for such businesses, considering the nature of business or customer base.
About Ministry of Finance-
- The Ministry of Finance is an important ministry within the Government of India concerned with the economy of India, serving as the Indian Treasury Department.
- Founded – 29 October 1946
- Headquarters – New Delhi
- Minister– Nirmala Sitharaman
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