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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.
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