DYNAMICS OF QR CODE ON B2C INVOICES IN GST

 In order to encourage digital payments, the concept of dynamic QR Code is being implemented where buyer can scan the code and make payment from mobile wallet directly. Further, at many counters in shops/malls, we often find static QR code which is scanned by the buyer but the buyer has to enter the amount to be paid to the shop (in the mobile payment App). Therefore, dynamic QR code, is deemed to be QR Code for the purpose of GST, as it has the payment details and thus ‘scan and pay’ in one go will be possible.

Dynamic QR Code was initially envisaged to be implemented from 1^st April, 2020, however, due to pandemic, it was proposed to be implemented from 1^st October, 2020 with a further extension till 1^st December, 2020. Currently, a conditional waiver from penalty for the period 1^st December, 2020 till 31^st March, 2021 has been given only if it is executed by the taxpayer w.e.f. 1^st April, 2021. Since, the date is approaching and the mechanism has to get ready for its smooth launch, therefore, CBIC has given certain clarifications on 23^rd February, 2021.

Dynamic QR Code required on B2C tax invoices (not notified in case of Bill of Supply) is required for entities with aggregate turnover of more than INR 500 crores in any of the FYs from 2017-18 onwards which originally was envisaged only if the said limit exceeded in a FY. It is made at par with the same approach followed in implementation of e-invoicing also for generating IRN. Since B2C invoices also includes export supplies, however, as the e-invoicing was already made mandatory for export supplies wherein along-with IRN, QR Code is generated by the IRP portal itself, unlike in case of dynamic QR Code in B2C supplies which is self-generated, therefore, the duplicate requirement as per law has now been clarified that exports supplies are deemed as B2B supplies for the purpose of e-invoice, therefore, no requirement to generate QR code by taxpayer.

CBIC has clarified on issues arising in respect of implementation of dynamic QR Code, for which it has first clarified that dynamic QR code shall contain supplier GSTIN, supplier UPI id, Payee’s Bank details, Invoice number & date, Invoice value, GST, etc. so that buyer can scan the same to make digital payment directly.

Situation where the supplier displays dynamic QR code but the buyer prefers to make the payment without using dynamic QR code, it will be deemed to have complied with the requirement of Dynamic QR code, only if the supplier provides cross reference of the payment made through UPI, credit card, debit card, online banking or cash on the invoice.

The Government has given the flexibility by permitting other electronic mode of payment like UPI Collect, UPI Intent or similar other modes of payment through mobile apps or computer-based apps, if the payment is made using such electronic means before issuance of invoice, provided cross- reference of payment is made on the invoice, else the supplier has to provide dynamic QR code on the invoice.

 

In fact, in situations where payments have been made before issuance of invoice, if the cross- referencing of payment made through electronic mode or cash or combination of both, is made on invoice by the supplier, it will be deemed to have complied with the requirements of dynamic QR code. In simple words, dynamic QR code will not be displayed where invoice has been issued in this situation but will contain the details of payment made, still it will be deemed to have complied with the conditions of dynamic QR code, but wherever payment is made after issuance of invoice, it is mandatory to have dynamic QR code.

Since the dynamic QR code applies for each and every supplier liable to issue such code for B2C supplies, therefore, clarification has been made in respect of the suppliers making supply through e-commerce portal or application that if the said supplier gives cross-reference of payment on the invoice, it shall be deemed to have complied with the requirements of dynamic QR Code, however, where the payment is made after issuance of invoice, dynamic QR code is required.