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Clarification regarding applicability of Dynamic Quick Response (QR) Code on B2C invoices

CS Lalit Rajput 
Updated on 26 February 2021

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Central Board of Indirect Taxes and Customs (CBIC), GST Policy Wing vide Circular no. 146/02/2021-GST and F.No.CBEC-20/16/38/2020-GST dated 23rd February 2021 has issued Clarification in respect of applicability of Dynamic Quick Response (QR) Code on B2C invoices and compliance of notification 14/2020- Central Tax dated 21st March 2020 - Reg.

The Circular was issued to

  • The Principal Chief Commissioners/
  • Chief Commissioners/
  • Principal Commissioners/
  • Commissioners of Central Tax (All)
  • The Principal Directors General/
  • Directors General(All)

Notification No. 14/2020 - Central Tax, dated 21st March 2020 had been issued which required a Dynamic QR Code on B2C invoice issued by taxpayers having an aggregate turnover of more than 500 crore rupees, w.e.f. 01.12.2020. Further, vide Notification No. 89/2020-Central Tax, dated 29th November 2020, the penalty had been waived off for non-compliance with the provisions of Notification No.14/2020 - Central Tax for the period from 01st December 2020 to 31st March 2021, subject to the condition that the said person complies with the provisions of the said Notification from 01st April 2021.

Clarification regarding applicability of Dynamic Quick Response (QR) Code on B2C invoices

Clarification given by Department

Sl.

Issues

Clarifications

1. 

To which invoice is Notification No 14/2020- Central Tax dated 21st March 2020 applicable? Would this requirement be applicable on invoices issued for supplies made for Exports?

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 the following cases:

i). Where the supplier of taxable service is:

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

b) a goods transport agency 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 an exhibition of cinematography in films in multiplex screens

ii). OIDAR supplies made by any registered person, who has obtained registration under section 14 of the IGST Act 2017, to an unregistered person.

As regards the 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 Notification no. 13/2020-Central Tax, dated 21st March 2020 treating them as Business to Business (B2B) supplies, Notification no. 14/2020- Central Tax, dated 21st March 2020 will not be applicable to them.

2.

What parameters/ details are required to be captured in the Quick Response (QR) Code?

Dynamic QR Code, in terms of Notification No. 14/2020-Central Tax, dated 21st March 2020 is required, inter-alia, to contain the following information: -

i. Supplier GSTIN number

ii. Supplier UPI ID

iii. Payee's Bank A/C number and IFSC

iv. Invoice number & invoice date,

v. Total Invoice Value and

vi. GST amount along with breakup i.e. CGST, SGST, IGST, CESS, etc.

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

3.

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

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

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

i). Using any mode like UPI, credit/ debit card or online banking or cash or combination of various modes of payment, with or without using Dynamic QR Code, and the supplier provides a cross-reference of the payment (transaction id along with the date, time and amount of payment, mode of payment like UPI, Credit card, Debit card, online banking etc.) on the invoice; or

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

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

4.

If the 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 the merchant as well as the transaction are displayed/ captured otherwise, how can the requirement of Dynamic QR Code as per this notification be complied with?

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

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

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?

If cross-reference of the payment received either through electronic mode or through 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 the invoice, the supplier shall provide a Dynamic QR Code on the invoice.

6.

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

The provisions of the 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, the supplier is making supply through the e-commerce portal or application, and the said supplier gives cross-references of the payment received in respect of the said supply on the invoice, then such invoices would be deemed to have complied with the requirements of the Dynamic QR Code. In cases other than pre-paid supply i.e. where payment is made after generation/issuance of the invoice, the supplier shall provide a Dynamic QR Code on the invoice.

 

Disclaimer: Every effort has been made to avoid errors or omissions in this material. In spite of this, errors may creep in. Any mistake, error or discrepancy noted may be brought to our notice which shall be taken care of in the next edition. In no event, the author shall be liable for any direct, indirect, special or incidental damage resulting from or arising out of or in connection with the use of this information.

 

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