RBI has advised banks to refund the charges collected on or after 01st Jan 2020

Check out our new audio content!

Banks are, therefore, advised to immediately refund the charges collected, if any, on or after 01st 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 transactions carried through the said prescribed modes.


Circular No. 16 /2020

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 reg.

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 Bank 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 Debit Card powered by RuPay; (i) Unified Payments Interface (UPI) (BHIM-UPI); and (m) Unified Payments Interface Quick Response Code (UPI QR Code) (BHIM-UPI QR Code) were notified as prescribed electronic modes under section 269 SU of the IT Act.

ALSO READ:  ITD detects Benami business of running of petrol outlets in Meghalaya

2. A Circular No. 32/2019 dated 30.12.2019 was issued by the Board 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 01st January 2020 on payment made through prescribed electronic modes. However, representations have been received that some banks are imposing and collecting charges on transactions carried out through UPLAY certain number of transactions are allowed 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 271DB of the IT Act as well as section 26 of the PSS Act.

3. Banks are, therefore, advised to immediately refund the charges collected, if any, on or after 01st 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 transactions carried through the said prescribed modes.

(Ankur Goyal)
Under Secretary to the Govt. of India

Copy to:

  1. PS to FM/OSD to FM/PS to MoS(F)/OSD to MoS(F)
  2. PPS to Secretary (Revenue)
  3. Chairman CBDT & All Members CBDT
  4. All Pr. DGsIT/Pr. CCsIT/DGsIT/CCIsIT with a request to ensure compliance of the provisions of section 269SU of the IT ACT read with section 10A of the PSS Act.
  5. All Joint Secretaries/CsIT/Director Deputy Secretaries/Under Secretaries of CBDT
  6. The C&AG of India
  7. The JS & Legal Adviser. Ministry of Law & Justice,
  8. CIT (M&TP) Official Spokesperson of CBDT
  9. O/o Pr DGIT (Systems) for uploading on official website
  10. JCIT (Database Cell) for uploading a www.irsofficersonline.gov.in
ALSO READ:  E-filing of Income Tax Returns registers an increase of 19%

Read more from here: Circular No. 16/2020


Hii, want to get publish your article at www.bharatax.in, then submit your article here or send a mail to article.bt@gmail.com

admin
Author: admin

BharaTax is an online Blog portal for reporting all the latest articles, judgments, Circulars, orders, and notifications relating to Taxation Laws in India.

Share on:

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.