164 Views
Imposition of charge on the prescribed electronic modes under section
269SU of the Income-tax Act, 1961

F .No .370142/35/2019-TPL-Pt
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

Dated: 30th August, 2020

Subject: Imposition of charge on the prescribed electronic modes under section
269SU of the Income-tax Act, 1961

In furtherance to the declared policy objective of the Government to encourage digital
transactions and move towards a less-cash economy. the Finance (No. 2) Act 2019 inserted
a new provision namely section 269SU in the Income-tax Act, 1961 (“the IT Act”), which
provides that every person having a business turnover of more than Rs. 50 crores during the
immediately preceding previous year shall mandatorily provide facilities for accepting
payments through prescribed electronic modes. Further, a new provision namely section
10A was also inserted in the Payment and Settlement Systems Act 2007 (“the PSS Act”),
which provides that no Sank or system provider shall impose any charge on a payer making
payment, or a beneficiary receiving payment, through electronic modes prescribed under
section 269SU of their IT Act. Subsequently vide notification no. 105/2019 dated 30.12.2019
(i) Debit Card powered by RuPay; (ii) Unified Payments Interface (UPI) (SHIM-UPI); and (iii)
Unified Payments Interface Quick Response Code (UPI QR Code) (SHIM-UPI QR Code)
were notified as prescribed electronic modes under section 269 SU of the IT Act.

  1. A circular no. 32/2019 dated 30.12.2019 was issued by the Soard to clarify that
    based on section 10A of the PSS Act, any charge including the MDR (Merchant Discount
    Rate) shall not be applicable on or after 01 ” January, 2020 on payment made through
    prescribed electronic modes. However, representations have been received that some
    banks are imposing and col lecting charges on transactions carried out through UPI. A
    certain number of transactions are al lowed free of charge beyond which every transaction
    bears a charge. Such practice on part of banks is a breach of section 10A of the PSS Act as
    well as section 269SU of the IT Act. Such breach attracts penal provisions under section
    271 DS of the IT Act as well as section 26 of the PSS Act.
  2. Sanks are, therefore, advised to immediately refund the charges collected, if any, on
    or after 1″ January, 2020 on transactions carried out using the electronic modes prescribed
    under section 269SU of the IT Act and not to impose charges on any future nsactions
    carried through the said prescribed modes.

(Ankur Goyal)

Under Secretary to the Govt. of India


Comments

Open chat