Clarification regarding applicability of Dynamic QR Code on B2C invoices and compliance of Notification 14/2020- CT dated 21st March 2020

CBIC issued Circular No.146/02/2021-GST on dt 23-02-2021 regarding the applicability of Dynamic QR Code on B2C invoices and compliance of N.No.14/2020- CT dated 21-03-2020.

• CBIC issued N.No. 14/2020-CT dated 21-03-2020 issued which requires Dynamic QR Code on B2C invoice issued by taxpayers having aggregate turnover more than 500 crore rupees , w.e.f. 01.12.2020.
• Further, through N.No. 89/2020-CT dated 29-11-2020, penalty has been waived for non-compliance of the provisions of N.No.14/2020–CT for the period from 01^st  December, 2020 to 31^st March, 2021, subject to the condition that the said person complies with the provisions of the said Notification from 01-04-2021.

Board hereby clarifies the issues as mentioned below : -

Issue-1

To which invoice is N.No 14/2020-CT dated 21-03-2020 applicable ? Would this requirement be applicable on invoices issued for supplies made for Exports?

Clarification

This notification is applicable to a tax invoice issued to an unregistered person by a registered person (B2C invoice)

whose annual aggregate turnover exceeds 500 Cr rupees in any of the financial years from 2017-18 onwards.

However, the said notification is not applicable to an invoice issued in following cases:

i. Where the supplier of taxable service is:

a) an insurer/banking company/financial institution, including a non-banking financial company;

b) a GTA ,supplying services in relation to transportation of goods by road in a goods carriage;

c) supplying passenger transportation service;

d) supplying services by way of admission to exhibition of cinematograph in films in multiplex screens

ii. OIDAR supplies made by any registered person, who has obtained registration u/s-14 of IGST Act 2017, to an unregistered person.

Regarding supplies made for exports

though such supplies are made by a registered person to an unregistered person, however, as e-invoices are required to be issued in respect of supplies for exports, in terms of N.No. 13/2020-CT dated 21-03-2020 treating them as Business to Business (B2B) supplies, N.No. 14/2020- CT, dated 21-03-2020 will not be applicable to them.

Issue-2

What parameters/ details are required to be captured in QR Code?

Solution

Dynamic QR Code, in terms of N.No. 14/2020-CT dated 21-03-2020 is required, inter-alia, to contain the following information: -

1. Supplier GSTIN number
2. Supplier UPI ID
3. Payee’s Bank A/C number and IFSC
4. Invoice number & invoice date,
5. Total Invoice Value and
6. GST amount along with breakup i.e. CGST, SGST, IGST, CESS, etc.

Further, Dynamic QR Code should be such that it can be scanned to make a digital payment.

Issue-3

If a supplier provides/displays Dynamic QR Code, but customer opts to make payment without using Dynamic QR Code, then will the cross reference of such payment, made without use of Dynamic QR Code, on the invoice, be considered as compliance of Dynamic QR Code on the invoice?

Solution

If supplier has issued invoice having Dynamic QR Code for payment, the said invoice shall be deemed to have complied with Dynamic QR Code requirements.

In cases where supplier has digitally displayed the Dynamic QR Code and customer pays for the invoice: -

1. Using any mode like UPI, Credit/Debit card/Online banking/Cash or combination of various modes of payment,

• with or without using Dynamic QR Code, and
• supplier provides a cross reference of the payment (transaction id along with date, time and amount of payment, mode of payment like UPI, Credit card, Debit card, online banking etc.) on the invoice ; or

2. In cash, without using Dynamic QR Code and the supplier provides a cross reference of the amount paid in cash , along with date of such payment on the invoice;

Said invoice shall be deemed to have complied with the requirement of having Dynamic QR Code.

Issue-4

If supplier makes available to customers an Electronic mode of payment like UPI Collect/UPI Intent or similar other modes of payment, through mobile applications or computer based applications, where though Dynamic QR Code is not displayed, but the details of merchant as well as transaction are displayed/captured otherwise, how can the requirement of Dynamic QR Code as per this notification be complied with?

Solution

If the cross reference of payment made using such electronic modes of payment is made on the invoice, the invoice shall be deemed to comply with the requirement of Dynamic QR Code.

However, if payment is made after generation/issuance of invoice, the supplier shall provide Dynamic QR Code on the invoice.

Issue-5

Is generation/printing of Dynamic QR Code on B2C invoices mandatory for pre-paid invoices i.e. where payment has been made before issuance of the invoice?

Solution

If cross reference of payment received either through Electronic mode/Cash or combination thereof is made on the invoice, then the invoice would be deemed to have complied with the requirement of Dynamic QR Code.

In cases other than pre-paid supply i.e. where payment is made after generation / issuance of invoice, the supplier shall provide Dynamic QR Code on the invoice.

Issue-6

Once E-commerce operator or online application has complied with Dynamic QR Code requirements, will the suppliers using such E-commerce portal/application for supplies still be required to comply with the requirement of Dynamic QR Code?

Solution

Provisions of Notification shall apply to each supplier/registered person separately, if such person is liable to issue invoices with Dynamic QR Code for B2C supplies as per the said notification.

In case, supplier is making supply through E-commerce portal/application and gives cross references of payment received in respect of the said supply on invoice, then such invoices would be deemed to have complied with the requirements of Dynamic QR Code.

In cases other than pre-paid supply i.e. where payment is made after generation / issuance of invoice, the supplier shall provide Dynamic QR Code on the invoice.

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