FAQ on section 269SU

Article by Manish Agarwal, CEO Tax Aachary

In line with the government’s push for digital transactions, Finance (No. 2) Act, 2019 had inserted a new section 269SU (which has come into force from 1st Nov 2019)
 
Accordingly, “specified person” / businesses shall mandatorily provide facilities for accepting payments through prescribed electronic modes.
 
The Central Board of Direct Taxes (CBDT) has recently issued Circular no. 32 ]of 2019 dated 30th December 2019 and Notification No.105/2019 dated 30th December 2019) wherein CBDT has prescribed electronic modes for accepting payments in accordance with newly inserted Section 269SU of the Income-tax Act, 1961 (‘the Act’) read with Rule 119AA of the Income-tax Rules, 1962 (‘the Rules’).
 
What it means is that, if your business has a turnover of INR 50 Crores for the financial year 2019-20, the below modes of receiving moneys from customers need to be ready and available as at 30th January 2020.
 
Penalties: As per section 271DB - penalty of Rs 5000 per day in case of failure by the specified person to comply with the provisions of Sec. 269SU

FAQs

 

Who is a specified person?

every person carrying on business, if his total sales, turnover or gross receipts, as the case may be, in business exceeds INR 50 Crs during the immediately preceding previous year
 

What are the electronic modes to be implemented?

  1. Debit Card powered by RuPay,
  2. Unified Payments Interface (UPI) (BHIM-UPI) and
  3. Unified Payments Interface Quick Response Code (UPI QR Code) (BHIM-  UPI QR Code)

Is it mandatory to implement all the 3 electronic modes by 31st Jan 2020?
Yes, it is mandatory to comply and enable all the 3 modes as specified in the CBDT notification

Is this applicable for B2B as well as B2C considering the fact that in B2B space, there might be not be any payments through UPI and debit card route?
The circular does not differentiate between B2B and B2C and it appears to be applicable to all, though the specified 3 methods of payment may be redundant in the B2B scenario.

Generally in case of B2B, the established mode of payment/ banking channels are generally used as the value of transactions are high. However, it appears that this section is applicable without any exception

Is this applicable for B2B as well as B2C ?
The circular does not differentiate between B2B and B2C and it appears to be applicable to all, though the specified 3 methods of payment may be redundant in the B2B scenario.
 

Generally in case of B2B, the established mode of payment/ banking channels are generally used as the value of transactions are high. However, it appears that this section is applicable without any exceptions

Is this applicable for FY 2019-20?
As per the provisions of section 269SU threshold limit of Rs.50 Crs turnover need to be applied to immediately preceding previous year. In case the turnover is less than Rs. 50 Crs in FY 2018-19 and more than Rs.50 Crs in FY 2019-20, then the abovementioned electronic modes of payments need to be facilitated with immediate effect from 1st April 2020.

 

There is no clear guideline for this in the circular and as we understand further clarifications are sought for.

Connect

(0) Comments