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

 

This is to update you on the recent clarifications issued by the CBIC vide Circular No. 146/02/2021 dated February 23, 2021 regarding clarification in respect on applicability of Dynamic Quick Response (QR) Code on B2C invoices and compliance of Notification 14/2020 - Central Tax, dated March 21, 2020.

 

To recap, as per Notification No. 14/2020-CT dated March 21, 2020, w.e.f. December 01, 2020, registered persons (other than those specified), whose aggregate turnover in a financial year exceed INR 500 crore, issuing invoice to unregistered person (i.e. B2C invoice), were required to provide a dynamic quick response (QR) code on such invoice.  However, CBIC vide notification no. 89/2020-Central Tax Dated November 29, 2020 had waived the amount of penalty leviable under Section 125 of Central Goods and Services Tax Act, 2017, relaxing the requirement to provide dynamic QR code on B2C invoices during the period December 01, 2020 to March 31, 2021.

 

We have summarized key clarifications provided in the aforesaid circular below for your ready reference –

 

►    Applicability of Notification 14/2020 - Central Tax, dated 21 March 2020

 

·        Dynamic QR code is applicable on a tax invoice issued to an unregistered person by a registered person (B2C invoice) whose annual aggregate turnover exceeds INR 500 crores in any of the financial years from 2017-18 onwards.  However, it is not applicable for following cases:

 

a)     Where the supplier of taxable service is:

 

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

o    a goods transport agency supplying services in relation to transportation of goods by road in a goods carriage;

o    supplying passenger transportation service;

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

 

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

 

►    Applicability of Dynamic QR code on export invoices

 

Since an e-invoice is required to be issued in respect of export transactions in terms of Notification no. 13/2020-Central Tax, dated March 21, 2020 treating them as Business to Business (B2B) supplies, Dynamic QR code requirement on such invoices will not be applicable

 

►    Parameters / details required to be captured in the Dynamic QR Code

 

Dynamic QR code is required to contain the following information:

 

·        Supplier GSTIN number

·        Supplier UPI ID

·        Payee's Bank A/C number and IFSC

·        Invoice number and invoice date

·        Total Invoice Value

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

 

►    Clarification in case where the supplier provides / displays Dynamic QR code, however the customer does not make payment using Dynamic QR Code – Whether the supplier can be said to have complied with the requirement of Dynamic QR code on the invoice

 

·         If the 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 the supplier, has digitally displayed the Dynamic QR Code and the customer pays for the invoice-

 

-       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 date, time and amount of payment, mode of payment like UPI, Credit card, Debit card, online banking etc.) on the invoice; or 

 

-       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;

 

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

 

►    Requirement to print Dynamic QR code on B2C invoices where payment has been made before issuance of the invoice

 

It has been clarified that in case the 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.

 

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

 

►    Applicability of dynamic QR code in respect of suppliers of e-commerce operators (ECO) in case where the ECO has complied with the requirement

 

If the supplier is liable to issue invoices with Dynamic QR Code for B2C supplies as per the said notification, then the said requirement has to be complied by each supplier / registered person separately. In case, the supplier is making supply through the ECO 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 Dynamic QR Code. However, 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.