☐ Has threshold applicability been verified? ☐ Have prescribed modes been identified? ☐ Have POS / payment-gateway integration been operationalised? ☐ Have UPI QR codes been deployed? ☐ Have recipients been communicated payment-mode…
31A
CGST Act · Section 31A
Digital payment facility
Chapter VII — Tax Invoice Credit and Debit NotesCGST Act, 2017
Section 31A digital payment compliance — checklist (19 items)
Section 31A digital payment compliance — checklist (19 items)
☐ Has threshold applicability been verified?
☐ Have prescribed modes been identified?
☐ Have POS / payment-gateway integration been operationalised?
☐ Have UPI QR codes been deployed?
☐ Have recipients been communicated payment-mode options?
☐ Has Income-tax s. 269SU coordination been done?
☐ Have merchant agreements been preserved?
☐ Has POS configuration been documented?
☐ For sectoral exemptions, has Notification framework been verified?
☐ Has penalty exposure framework been understood?
☐ Has Bharti Airtel substance-over-form discipline been applied?
☐ Has Mohit Minerals constitutional framework been applied?
☐ Has Mafatlal procedural-fairness framework been observed?
☐ Has Vatika prospective-operation been applied?
☐ Has Whirlpool framework been considered for any disputes?
☐ Has coordination with broader compliance been done?
☐ Has documentary trail been preserved?
☐ Has AAR application been considered for ambiguous cases?
☐ Has the file been reviewed for audit-defensibility?
Worked examples — five live scenarios
Example 1 — Above-threshold retailer
Facts: Retailer with Rs. 100 cr turnover. Operates 50 outlets.
Analysis: s. 31A + s. 269SU operative. Operational framework — POS at each outlet supporting UPI / debit card / RuPay. QR codes for UPI. Customer choice. Compliance + documentary trail.
Result: Operational implementation framework.
Example 2 — Threshold-crossing event
Facts: Business turnover increased to Rs. 60 cr in FY 2024-25. Was Rs. 45 cr in FY 2023-24.
Analysis: s. 269SU threshold trigger (Rs. 50 cr previous-year basis). s. 31A coordinated. Operational implementation framework required. Practitioner advice — immediate operational implementation; documentary trail.
Result: Threshold-crossing framework activated.
Example 3 — Sectoral exemption query
Facts: Regulated entity (e.g., specific RBI-regulated NBFC) above threshold but with specific payment framework.
Analysis: For potential sectoral exemption, AAR under s. 97 or representation framework. Coordinate with RBI / sectoral regulator. Maintain compliance pending clarification.
Result: AAR / clarification framework.
Example 4 — Non-compliance penalty
Facts: Above-threshold business did not operationalise digital payment modes. Audit identifies non-compliance.
Analysis: s. 269SU s. 271DB penalty Rs. 5,000 per day. Cascading for prolonged non-compliance. Combined CGST + Income-tax framework. Practitioner defence — immediate compliance + representation.
Result: Penalty exposure significant.
Example 5 — Documentary defence
Facts: Department alleges non-compliance. Business has operationalised modes but documentary trail incomplete.
Analysis: Practitioner builds documentary trail — merchant agreements, POS configuration records, QR-code deployment evidence. Substantive compliance argument under Bharti Airtel framework.
Result: Substantive compliance defence with documentary support.
Planning and litigation strategy
Litigation defence
Cross-references