CBDT exempts taxpayers carrying on only B2B transactions from providing prescribed mandatory electronic modes of paymen

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This Tax Alert summarizes a recent Circular^[1] (Circular) issued by the Central Board of Direct Taxes^[2] (CBDT) clarifying that the taxpayers engaged only in business- to-business (B2B) transactions are not required to provide mandatory electronic modes of payment as prescribed for the purpose of newly inserted section (S.) 269SU of the Indian Tax Law (ITL), which came into effect from 1 November 2019 but was operationalized from 1 January 2020. 

 

Pursuant to various representations made by stakeholders, the CBDT has granted relaxation to taxpayers engaged in B2B transactions. The Circular further states that the relaxation is available provided a taxpayer, during the tax year, does not undertake any transaction with retail customers and the cash receipts during the tax year does not exceed 5% of the aggregate of all amounts received, including the sum received for sales, turnover or gross receipts.