Marigold Ltd., an Indian Company engaged in trading of electronic appliances through retail stores all across India, reported a total turnover of 70…
CA Final · Direct Tax Laws and International Taxation · MTP · May 2024
Marigold Ltd., an Indian Company engaged in trading of electronic appliances through retail stores all across India, reported a total turnover of 70 crores during the previous year 2022-23 and 45 crores during the previous year 2023-24. The customers who purchase appliances from its stores can pay only through cash, cheque, credit card or debit card. Discuss the relevant provisions of the Act with respect to relevant compliances that should have been ensured by Marigold Ltd. and in the absence of such compliances, what will be the amount of penalty, if any, that can be levied on Marigold Ltd.
Suggested Answer and Working Notes:
As per section 269SU, Marigold Ltd. is required to provide facility for accepting payment through the prescribed electronic modes, in addition to the facility for other electronic modes of payment of debit card or credit card provided by Marigold Ltd., since its total turnover in business during the immediately preceding previous year. i.e., P.Y. 2022-23 is 70crores, which exceeds the prescribed threshold of 50crores. Prescribed electronic modes are (1) Debit Card powered by RuPay; (2) Unified Payments Interface (UPI) (BHIM-UPI); and (3) Unified Payments Interface Quick Response Code (UPI QR Code) (BHIM-UPI QR Code). The failure to provide facility for electronic modes of payment prescribed under section 269SU by Marigold Ltd. would attract a penalty under section 271DB of a sum of 5,000, for every day during which such failure continues. However, penalty shall not be imposed, if Marigold Ltd. proves that there were good and sufficient reasons for such failure. Further, any such penalty shall be imposed by the Joint Commissioner.
Topics: Deduction, Collection and Recovery of Tax
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