B2B payments exempted from using prescribed E-payment gateways

The Central Board of Direct Taxes vide circular dated 20 May, 2020, has exempted Business to Business(B2B) payments from using prescribed E-payment gateways. Section 269SU of income-tax Act, 1961 requires every person carrying on business and having sales/turnover/gross receipts from business of more than Rs 50 Crores shall mandatorily provide facilities for accepting payments through prescribed electronic modes. Subsequently notification dated 30.12.20 19 enlisted following as prescribed E-pay gateways.

  • Debit Card powered by RuPay
  • Unified Payments Interface (UPI) (BH IM-UPI)
  • Unified Payments Interface Quick Response Code (UPI QR Code) (BHIM-UPI QR Code)

Representations have been received that the requirement is burdensome to Business to Business payments, since the prescribed electronic modes have a maximum payment limit per transaction or per day. It is hereby clarified that the provisions of section 269SU of the Act shall not be applicable to a specified person having only B2B transactions 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.

Click here to read the Circular.