As part of the government’s push for a cash-less economy, businesses with an annual turnover of Rs 50 crore or more that are required to provide digital payment facilities to customers will be penalised Rs 5,000 a day for failing to accept payments in the prescribed digital modes from February 1, 2020.
The deadline for these shops, firms or companies is January 31 by when they have to install the digital payment system, a circular by the Central Board of Direct Taxes (CBDT) reads, CNBCTV18.com reported.
The move was aimed at giving sufficient time to "the specified person" to install and operationalise the facility for accepting payment through prescribed electronic modes, said CBDT in the circular.
In a circular, CBDT said penalty under Section 271DB of the Finance Act shall not be levied if the specified person installs and operationalises the facilities on or before January 31, 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 February 1, 2020 under section 271DB of the Act for such failure," the circular dated December 30 said.
In order to encourage digital economy and move towards a less-cash economy, a new provision was inserted in the Income Tax Act to require every person having a business turnover of more than Rs 50 crore to mandatorily provide facilities for accepting payments through prescribed electronic modes.
RuPay and UPI are among the prescribed mode of payment for digital transactions without any Merchant Discount Rate (MDR). The MDR is the percentage of the digital transaction that a merchant pays to banks and this cost is most often passed on to the customers.
Finance Minister Nirmala Sitharaman had, in her Budget speech in July, listed out BHIM UPI, UPI-QR Code, Aadhaar Pay and certain debit cards among others as the low-cost digital modes of payment which could be offered without levying MDR in order to promote a less-cash economy.
Last Saturday, the minister announced that the MDR charges for businesses with over Rs 50 crore annual revenues will be waived off from January 1, 2020.
Section 10A of the Payment and Settlement Systems Act, 2007 which was inserted by the Finance Act provides that no bank or system provider shall impose and charge on a payer, or a beneficiary receiving payment, through electronic mode prescribed under Section 269SU of the Act.
"Consequently, any charge including the MDR shall not be applicable on or after January 1, 2020 on payment made through prescribed electronic modes," the CBDT circular said.
Comments
0 comment