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Explained | Digital payment facility must for businesses with over ₹50-crore turnover

Photo for representation.

Photo for representation.  

Non-adherence will attract a penalty of ₹5,000 per day from February 1, 2020

With effect from January 1, 2020, the Centre has made it mandatory for business entities having a turnover of over ₹50 crore to provide facilities for accepting payments via the prescribed electronic modes.

Non-adherence will attract a penalty of ₹5,000 per day from February 1, 2020.

Prescribed modes

The Central Board of Direct Taxes (CBDT) has notified the modes of payment, in addition to the facility for other electronic modes, as:

(i) Debit Card powered by RuPay

(ii) Unified Payments Interface (UPI) (BHIM-UPI);

(iii) Unified Payments Interface Quick Response Code (UPI QR Code) (BHIM-UPI QR Code).

Purpose of the order

The directive is meant to encourage digital economy and move towards a less-cash economy, for which a new provision was inserted in the Income-Tax Act earlier this year.

No charge on payer/recipient

As directed by the government, banks or system providers will not impose any charge on anyone making or receiving payment through the prescribed electronic modes. Therefore, any charge — including the Merchant Discount Rate — will not be applicable on or after January 1, 2020, on such transactions.

E-mode payment must

From November 1, the CBDT had made it mandatory for businesses with over ₹50 crore turnover to offer the facility for electronic modes of payment.

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Printable version | Feb 22, 2020 1:27:57 PM | https://www.thehindu.com/business/explainer-digital-payment-facility-must-for-businesses-with-over-50-crore-turnover/article30468049.ece

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