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The Centre has announced a slew of measures to promote cashless payments, including levying a TDS at the rate of 2 per cent on cash payments in excess of ₹1 crore in a year.
The Finance Ministry has also made it mandatory for individuals and businesses to provide facility for accepting payments through prescribed electronic modes if total sales, turnover or gross receipts in the business exceeds ₹50 crore during the immediately preceding previous year.
Failure to comply will attract a penalty.
“In order to achieve the mission of the government to move towards a less cash economy to reduce generation and circulation of black money and to promote digital economy, it is proposed to insert a new Section 269SU in the Act so as to provide that every person, carrying on business, shall provide facility for accepting payment through the 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 in business exceeds ₹50 crore during the immediately preceding previous year,” the Finance Ministry stated.
“In order to ensure compliance of the aforesaid provisions, it is further proposed to insert a new Section 27IDB to provide that failure to provide facility for electronic modes of payment prescribed under Section 269SU shall attract penalty of a sum of ₹5,000, for every day during which such failure continues. However, the penalty shall not be imposed if the person proves that there were good and sufficient reasons for such failure. Any such penalty shall be imposed by the Joint Commissioner,” it added.
‘Limited impact’
Naveen Surya, Chairman, Fintech Convergence Council, said, “Two per cent TDS on cash withdrawal of over ₹1 crore is penalising high usage of cash; however, that would only have a moderate impact. Industry suggestions and various reports had recommended providing direct GST benefits to merchants for using digital payment options or complete exemption on digital payments and domestic remittances.”
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