DYNAMIC QUICK RESPONSE CODE ON B2C INVOICES

[Mr. M. GOVINDARAJAN]

QR Code

Quick Response Code is abbreviated as QR code. It is a two-dimensional barcode applied to items for presenting information in its machine-readable format.    The QR Code will be used to provide information about a particular invoice in a quick manner, without the need to retrieve such information from an external source, say, the internet. 

QR Code under GST laws

Vide Notification No. 72/2019-Central Tax, dated 13.12.2019, the Central Government notified that an invoice issued by a registered person, whose aggregate turnover in a financial year exceeds ₹ 500 crores, to an unregistered person (B2C invoice), shall have Quick Response (QR) code with effect from 01.04.2020.  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.

Vide Notification No. 14/2020-Central Tax, dated 21.03.2020, the Central Government, in supersession of Notification No. 72/2019-Central Tax, dated 13.12.2019, notified that an invoice issued by a registered person, whose aggregate turnover in a financial year exceeds ₹ 500 crores to an unregistered person (hereinafter referred to as B2C invoice), shall have Dynamic Quick Response code.  where such registered person makes a Dynamic Quick Response 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 code, shall be deemed to be having Quick Response.    This notification came into force with effect from 01.10.2020.

The above said notification is not applicable to an invoice issued in the following cases-

• an insurer or a banking company or a financial institution, including a non banking financial company;
• a goods transport agency supplying services in relation to transportation of goods by road in a goods carriage;
• supplying passenger transportation service;
• supplying services by way of admission to exhibition of cinematograph in films in multiplex screens.
• OIDAR supplies made by any registered person, who has obtained registration under section 14 of IGST Act, 2017 to an unregistered person.

Vide Notification No. 71/2020-Central Tax, dated 30.09.2020 the Central Government made amendments to Notification No. 14/2020-Central Tax, dated 21.03.2020.   The ‘aggregate turnover in a financial year’ has been changed as any financial year  from 2017-18.  Thus the Notification applies to the financial year 2017 – 18 onwards.  The Notification also changed the effective date from 01.10.2020 to 01.12.2020.

Penalty

Section 125 of the Central Goods and Services Tax Act, 2017 provides that any person, who contravenes any of the provisions of this Act or any rules made there under for which no penalty is separately provided for in this Act, shall be liable to a penalty which may extend to ₹ 25,000/-.

Vide Notification No.89/2020-Central Tax, the Central Government waived the penalty  payable by any registered person under section 125 of the said Act for non-compliance of the provisions of Notification No. 14/2020-Central Tax, dated 21.03.2020,  between the period from the 01.12.2020 to the 31.03.2021, subject to the condition that the said person complies with the provisions of the said notification from the 01.04.2021. 

Contents of QR Code

The circular issued by the Department indicates that the QR Code is required to contain the following information-

• Supplier GSTIN number;
• Supplier UPID;
• Payee’s Bank account number and IFSC;
• Invoice number and invoice date;
• Total invoice value; and
• GST amount along with break up i.e., CGST, SGST/UTGST, IGST, CESS etc.

Applicable to exports?

The circular No.146/02/2021-GST, dated 23.02.2021clarifies the query as to whether this requirement is applicable on invoice issued for supplies made for exports.  The circular clarified that it will not be applicable to exports since the supplies made for export by a registered person to an unregistered person, e-invoices are to be issued in accordance with the terms of Notification No. 13/2020-Central Tax, dated 21.03.2020 treating them as Business to Business (B2B).

Making payment

The dynamic QR Code should be such that it can be scanned to make a digital payment.

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 customers 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 the date of such payment on the invoice.

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

If the supplier makes available to customers an electronic  mode of payment like UPI, Collect, UPI Internet or similar other modes of payment, through mobile applications or computer based applications, where the dynamic QR code is not displayed, but the details of merchant as well as transaction are displayed – 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.

Pre-paid invoices

The said circular gives clarification to the issue – 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?

The circular clarifies that 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 the generation/issuance of invoice, the supplier shall provide dynamic QR Code on the invoice.

E-Commerce

In case the supplier is making supply through the E-Commerce portal or application, and the said supplies gives cross reference 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.