The compliance of Dynamic Quick Response (QR) Code is relaxed till 31.03.2021 provided it is complied from 01.04.2021

[Ganeshan Kalyani]

Notification No.89/2020-Central Tax dated 29.11.2020 is published by CBIC. Vide this notification the amount of penalty payable by any registered person for non-compliance of the provisions of Notification no.14/2020-Central Tax dated 21.03.2020 is waived for the period between 01.12.2020 to 31.03.2021, subject to the condition that the said tax payer complies with the provisions of the said notification from 01.04.2021. 

In other words, the notification relaxes the compliance prescribed under rule 46 of CGST Rules, 2017, which requires the taxpayer having aggregate turnover exceeding five hundred crore rupees in any preceding financial year from 2017-18 onwards to have Quick Response (QR) Code on supplies made to an unregistered person i.e. on B2C invoices.

The tax payer shall be considered to have fulfilled the aforesaid requirement if he provides cross reference of the payment using a Dynamic Quick Response (QR) Code on B2C invoices. It indicates that QR code which is to be printed on the invoices shall have to configured / made by the taxpayer himself and that the Govt. will not be generating for the taxpayers unlike Invoice Reference Number and QR Code which is generated by Invoice Registration Portal (IRP) for taxpayers falling the requirement of E-Invoicing. 

The aforesaid provision of having QR Code on B2C invoices was inserted under rule 46 vide Notification No. 31/2019-Central Tax dated 28.06.2019. Thereafter, vide Notification no. 72/2019-Central Tax dated 13.12.2019 the Govt. notified the turnover limits and criteria for QR Code. It was prescribed that a registered person whose aggregate turnover in a financial year exceeds five hundred crore rupees shall have Quick Reference (QR) Code on supplies made to an unregistered person (B2C invoices).

It was also provided that where such registered person makes a Dynamic Quick Response (QR) code available to the recipient through a digital display, such B2C invoice issued by such registered person containing cross-reference of the payment using a Dynamic Quick Response (QR) code, shall be deemed to be having Quick Response (QR) code.

Later on vide Notification No.14/2020-Central Tax dated 21.03.2020 the earlier issued notification no.72/2019-Central Tax dated 13.12.2019 is suppressed. Through Notification no.14 it is notified that a registered person whose aggregate turnover in a financial year exceeds five hundred rupees shall have Quick Reference (QR) Code on supplies made to an unregistered person (B2C invoices). However, the said requirement of having QR Code on B2C invoices is not applicable to a registered person referred under sub-rule (2), (3), (4) and (4A) of rule 54 of CGST Rules, 2017.

The tax payers falling under sub-rule (2) of rule 54 are insurer or a banking company or a financial institution, including non-banking financial company. The tax payer falling under sub-rule (3) of said rule is goods transport agency supplying services in relation to transportation of goods by road in a goods carriage. The tax payers falling under sub-rule (4) and (4A) are the supplier of passenger transport service and supplier of services by way of admission to exhibition of cinematograph films in multiplex screens. 

All the tax payers falling under sub-rules referred in above para  are exempted from the requirement of having QR Code on B2C Invoices. And all other tax payers except those mentioned above having aggregate turnover exceeding five hundred crore rupees in a financial year shall print QR code on B2C invoices with effect from 01.10.2020.

Further vide Notification No.71/2020-Central Tax dated  30.09.2020 the word “in a financial year” is substituted with the word “any preceding financial year from 2017-18 onwards”. This indicates that the turnover limit is to be considered from 2017-18 onwards and not of preceding financial year. This would certainly include maximum taxpayer into the applicability of having QR Code on B2C invoices. Also, the date of effect has been revised from 01.10.2020 to 01.12.2020.

Now, vide Notification No.89/2020-Central Tax dated 29.11.2020 as stated in first para above, the Government has given relaxation from the compliance of the provision which requires every tax payer having turnover exceeding five hundred crore rupees in any preceding financial year from 2017-18 to have QR Code on B2C invoices from 01.12.2020 to 31.03.2021, subject to the condition that the said person complies with the said provision from 01.04.2021.

Summary

In summary, the requirement of having Dynamic Quick Response Code on all B2C invoices to be complied by tax payer having turnover more than five hundred crore rupees in any preceding financial year from 2017-18 onwards is extended till 31.03.2021. However, a condition is prescribed that w.e.f. 01.04.2021. the tax payer shall comply with the requirement of QR Code on B2C invoices. In case the tax payer fails to do so then the penalty u/s 125 shall be applicable. Because the notification states that penalty u/s 125 is waived till 31.03.2021 provided the tax payer complies the provision from 01.04.2021.