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February 24, 2021

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

by CA Shivam Jaiswal in GST

Clarification in respect of applicability of Dynamic Quick Response (QR) Code on B2C invoices.

Central Board of Indirect Taxes and Customs has issued a Circular No.  146/02/2021-GST  – dated February  23, 2021 Regarding : 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.

Highlights

  • 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. Therefore QR code is not applicable to such Export invoices.
  • Dynamic QR Code, shall 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.

Digital Display of QR code

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

  1. 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
  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;

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

  • Other than pre-paid supply i.e. where payment is made after generation /issuance of invoice– Supplier shall provide Dynamic QR Code on the invoice.

Pre-paid supply – 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.

  • Above provisions are equally applicable to the suppliers making supplies on the E-commerce platforms.

F. No. CBEC-20/16/38/2020-GST

Government of India

Ministry of Finance Department of Revenue

Central Board of Indirect Taxes and Customs

GST Policy Wing

To

The Principal Chief Commissioners / Chief Commissioners / Principal Commissioners / Commissioners of Central Tax (All)

The Principal Directors General / Directors General (All)

Madam/Sir,

Subject: 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.

2. Notification No. 14/2020-Central Tax, dated 21st March 2020 had been 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, vide Notification No. 89/2020- Central Tax, dated 29th November 2020, penalty has been waived for non-compliance of 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.

2. Various references have been received from trade and industry seeking clarification on applicability of Dynamic Quick Response (QR) Code on B2C (Registered person to Customer) invoices and compliance of Notification No. 14/2020-Central Tax, dated 21st March, 2020 as amended. The issues have been examined and in order to ensure uniformity in the implementation of the provisions of the law across the field formations, the Board, in exercise of its powers conferred under section 168(1) of the CGST Act, 2017, hereby clarifies the issues in the table below:

Sl. No.  Issues  Clarification
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 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 exhibition                  of cinematograph 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.
Sl. No.  Issues  Clarification
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: – Supplier GSTIN numberSupplier UPI IDPayee’s Bank A/C number and IFSCInvoice number & invoice date,Total Invoice Value andGST 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.
3.If a supplier provides/ displays Dynamic QR Code, but the 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?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: – 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 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 date of such payment on the invoice; The said invoice shall be deemed to have complied with the requirement of having Dynamic QR Code.
Sl. No.  Issues  Clarification
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 merchant as well as 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 Dynamic QR Code. However, if payment is made after generation / issuance of invoice, the supplier shall provide 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 invoice, the supplier shall provide 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 e-commerce portal or application for supplies still be required to comply with the requirement of 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 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.

3. It is requested that suitable trade notices may be issued to publicize the contents of this circular.

4. Difficulty, if any, in the implementation of the above instructions may please be brought to the notice of the Board. Hindi version would follow.

(Sanjay Mangal) Commissioner

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