50 CRORE & ABOVE- Digital Payments Acceptability!

Rule:

*Any business entity/person having business turnover/gross receipts exceeding INR 50 Crore in FY 2018-19, please note the following changes brought in to effect from 1st Nov:*

Section 269SU of the Income-Tax Act, 1961, applicable with effect from 1 November 2019, makes it mandatory to accept payments (ie provide facility to the customers for accepting payment) in prescribed electronic modes, in addition to existing modes, for entities having turnover exceeding INR 50 Crore.

Failure to provide such facility will be liable to a penalty of five thousand rupees, for every day during which such failure continues.

*What does it mean?*

CA, GST, INCOMETAX

Please ensure that you print your preference to accept payments from customers/debtors/payees in electronic mode by furnishing your E Mode payment details on your invoices / contracts / agreements / order acceptance letter etc.

*What is prescribed Electronic Mode in addition to existing electronic mode?*

At the outset, if you strictly encourage payments by payees to you to your bank accounts by NEFT, RTGS, IMPS as mentioned above it is reasonable compliance.  In addition, please try to arrange for E Modes like BHIM UPI, UPI-QR Code, Aadhaar Pay, Payment Gateways of banks / Financial Institutions / Payment Settlement Systems etc.

OPTIONS

*Despite arranging NEFT/RTGS/IMPS payments, if the customer comes and hands over a cheque /Demand Draft, what should be done?*

  1. a) Please advise them to use E Mode for making payments to you
  2. b) If they insist for cheque/DD payment only, please get a declaration signed duly by him/them on his/their commercial letter head if any (refer their Aadhar No and valid Mobile phone No too) stating the following:

I / We do not have net banking facility or any other E Mode at the time of payment / for the time being / always

I / We have no option but to pay by mode other than E Mode, though you insisted for payment by E Mode only

*Despite making all possible efforts and arrangements, in case a few payments are received in other than E-mode, will the penalty of Rs 5000 per day, be applied automatically?*

It is not an indiscriminate and mechanically imposed penalty.  You can prove your genuineness with necessary evidences and avoid such penalties.

@Certicom.in

Kedia Arpana & CO. 

Chartered Accountants

+91-83174-88035

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Certicom Consulting [ Kedia Arpana & Co ] is a group of Chartered Accountants in the business of Small Business Setup & Statutory Compliance including for Professionals for the past 15 years. We have been an established and popular company with an excellent track record for the best customer satisfaction.

Certicom Consulting

Certicom Consulting [ Kedia Arpana & Co ] is a group of Chartered Accountants in the business of Small Business Setup & Statutory Compliance including for Professionals for the past 15 years. We have been an established and popular company with an excellent track record for the best customer satisfaction.