Whether Section 269SU is applicable to B2B Transactions ?
Section 269SU: Acceptance of payment through prescribed electronic modes
Every person, carrying on business, shall provide facility for accepting payment through prescribed electronic modes, in addition to the facility for other electronic modes, of payment, if any, being provided by such person, if his total sales, turnover or gross receipts, as the case may be, in business exceeds fifty crore rupees during the immediately preceding previous year.
Summaries:
- Section 269SU is applicable to every person who carrying on the business and whose turnover exceeds Rs.50 Crores during the immediately preceding previous year.
- Section 269SU requires every person who is carrying on business to provide the facility for accepting payments through prescribed electronic mode
- This section came in to effect from 01-01-2020 and to equip yourself time has given up to 31-01-2020. (Circular No. 32/2019)
- Section 269SU is not applicable for B2B Transactions.
Section 269SU is not applicable for B2B Transactions (Clarification given by vide Circular No. 12/2020 dated 20/5/2020)
- Section 269SU of the Act shall not be applicable to a specified person having only B2B transaction s (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.
Rule 119AA: Prescribed electronic modes of payment for the purpose of section 269SU:
Every person, carrying on business, if his total sales, turnover or gross receipts, as the case may be, in business exceeds fifty crore rupees during the immediately preceding previous year shall provide facility for accepting payment through following electronic modes, in addition to the facility for other electronic modes of payment, if any, being provided by such person, namely: —
- Debit Card powered by RuPay;
- Unified Payments Interface (UPI) (BHIM-UPI); and
- Unified Payments Interface Quick Response Code (UPI QR Code) (BHIM-UPI QR Code).”
The Rule 119AA is applicable from 1 January 2020. Hence, from 1 January 2020, any person to whom the provisions of section 269SU are applicable should make available to its customers the methods of payment prescribed in Rule 119AA.
Section 10A of the Payment and Settlement Systems Act 2007
This section inserted by the Finance Act which provides that no bank or system provider shall impose any charge including MDR (Merchant Discount Rate) on a payer making payment, or a beneficiary receiving payment, through electronic mode prescribed under Section 269SU of the Act.
Section 271DB of the Income Tax Act 1961 (i.e. Penalty for failure to comply with provisions of section 269SU)
- If a person who is required to provide facility for accepting payment through the prescribed electronic modes of payment referred to in section 269SU, fails to provide such facility, he shall be liable to pay, by way of penalty, a sum of 5000/- for every day during which such failure continues:
Provided that no such penalty shall be imposable if such person proves that there were good and sufficient reasons for such failure.
- Any penalty imposable under this section shall be imposed by the Joint Commissioner of Income-tax.
- However, no penalty would be levied if the person installs and operationalises the prescribed payment facility by 31 January 2020.
- The penalty of Rs 5,000 per day would be leviable from 1 February 2020.