CIRCULAR NO.12

CircularNo.12- /2020

F.No.370 142135/20 19-TPL
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

Dated: 20~May, 2020

Subject: Clarifications in respect of prescribed electronic modes under section 269SU of
thcIncome-tax Act, 1961 – reg.
In furtherance to the declared policy objective of the Government to encourage digital
transactionsand move towards a less-cash economy, a new provision namely Section 269SU was
inserted in the [ncome-tax Act, 1961 (“the Act”), vide the Finance (No.2) Act 2019. This
sectionrequi resevery person carrying on business and having sa les/turnover/gross receipts from
business of more than Rs 50 Crores (“s pecified person”) in the immed iately preceding previous
yeartomandatorily provide facilities for accepting payments through prescribed electronic modes.
Subsequently vide notification no. 105/2019 dated 30.12.2019 (i) Debit Card powered by RuPay;
(ii) Unified Payments Interface (UPI) (BH IM-U PI); and (iii) Unified Payments Interface Quick
Response Code (UPI QR Code) (BHIM-UPI QR Code) were notified as prescribed electronic
modes.

2. Representations have been received statingthat the above requirement of mandatory
   facility for payments through the prescribed electronic modes isgen erally applicablein B2C
   (Business to Consumer) businesscs, which directly deal with retail customers. Moreover, since
   the prescribed electronic modes have a maximum payment limit per transaction or pcr day they
   are not so relevant to B2B (Business to Business) businesses, which generally receive large
   payments through other electronic modes of payment such as NEFr or RTGS. Mandating such
   businesses to provide the facility for accepting payments through prescribed electronic modes
   would cause administrative inconvenience and impose additional costs.
3. In view of the above, it is hereby clarified that the provisions of section 269SU of the Act
   shall not be applicable to a specified person having on ly B2B transactions (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.

(Ankur Goyal)

Under Secretary to the Govt. of India

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