CBDT gives wholesalers relief on electronic payment norms
May, 21st 2020
The Central Board of Direct Taxes (CBDT) has pruned the list of electronic payments methods wholesalers can offer, in a bid to make payment options more relevant to a business’ customer base.
CBDT said in a circular that wholesalers need not offer certain electronic payment methods, such as debit cards powered by RuPay, unified payments interface (UPI) and UPI quick response code, which are generally used by retail customers. They were made compulsory for businesses in 2019 with the aim of promoting a less-cash economy.
The move to exempt wholesalers from compulsorily offering these payment options is based on industry suggestions that these modes are more suitable for retail transactions and usually have a maximum payment limit per transaction, or per day, which do not apply to wholesalers, who receive payments through other electronic modes such as real-time gross settlement.
“Mandating such businesses to provide the facility for accepting payments through prescribed electronic modes would cause administrative inconvenience and impose additional costs," CBDT said.
Wholesalers who received most of their payments in the previous year in modes other than cash have been exempted from the requirements of Section 26SU of the I-T Act, under which payment modes such as RuPay card were prescribed.
“Since non-installation of such payment facility attracted significant penalty of 5,000 per day, many businesses were in doubt and were forced to install such payment facilities, even though such facilities were never used," said Shailesh Kumar, director, Nangia Andersen consulting.