NEW DELHI :
The Central Board of Direct Taxes (CBDT) has pruned the list of electronic payment methods that wholesalers have to offer in a move aimed at making payment options more relevant to the customer base of a business.
CBDT said in a circular that wholesalers need not offer certain electronic payment methods such as debit card 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 latest 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 that these usually have maximum payment limit per transaction or per day which do not apply to wholesalers. Wholesalers generally receive payments through other electronic modes such as real time gross settlement (RTGS.)
“Mandating such businesses to provide the facility for accepting payments through prescribed electronic modes would cause administrative inconvenience and impose additional costs,” the CBDT said explaining the rationale for the move. Wholesalers who received most of their payments in the previous year in modes other than cash, are exempted from the requirements of section 26SU of the Income Tax Act under which payment modes such as UPI, and RuPay debit card are prescribed, the circular explained.
“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 (typically used by individual customers mostly) were never supposed to be used for such businesses, considering the nature of business or customer base,” explained Shailesh Kumar, director at Nangia Andersen consulting.
