Money & Banking

From Feb 1, businesses will be fined ₹5,000/day if they do not offer digital payment facility

Our Bureau New Delhi | Updated on December 31, 2019 Published on December 31, 2019

Penalty will apply to firms with turnover of ₹50 crore or more

Come February 1, businesses with a turnover of ₹50 crore or more failing to operationalise payment system through RuPay debit card or BHIM UPI will be liable to pay a penalty at the rate of ₹5,000 a day.

A December 30 notification from the Income Tax Department has listed debit cards powered by RuPay, the Unified Payments Interface (UPI) (BHIM-UPI) and the Unified Payments Interface Quick Response Code (UPI QR Code) (BHIM-UPI QR Code) as prescribed modes of payment for undertaking digital transactions without any Merchant Discount Rate (MDR).

Along with the notification, the Central Board of Direct Taxes has also issued a clarification that from January 1, specified person, that is, businesses with an annual turnover of ₹50 crore or more “must provide the facilities for accepting payment through the prescribed electronic modes,” without any charge including MDR. Further, it says that the Finance Act 2019 has inserted a new section (271DB) that provides for levy of penalty of ₹5,000 per day in case of failure by the specified person to comply with the norm (providing facility of payment through prescribed electronic modes).

“To allow sufficient time to the specified person to install and operationalise the facility for accepting payment through prescribed electronic modes, it is hereby clarified that the penalty under Section 271DB of the Act shall not be levied if the specified person installs and operationalises the facilities on or before January 31, 2020,” the circular said.

It added that if the specified person fails to do so, he shall be liable to pay a penalty of ₹5,000 per day from February 1, 2020.

However, the law also provides that no such penalty will be levied if a person proves that there were good and sufficient reasons for failure to do so.

Published on December 31, 2019
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