Extension of Dynamic QR Code in case of B2C Tax invoices

Taxpayers who are required to issue Dynamic QR Code in case B2C supplies where their turnover is above ₹ 500 crores during any of the three financial years, relaxation is being provided and in case if they do not issue tax invoices with dynamic QR code there will be no levy of penalty under Section 125 of CGST Act 2017 till 30th Sep 2021.

This extension is being provided due to the on going pandemic. This is notified wide Notification No 28/2021 – Central Tax dated 30th June 2021.

Extract of the Notification

G.S.R. 450(E).—In exercise of the powers conferred by section 128 of the Central Goods and
Services Tax Act, 2017 (12 of 2017) (hereafter in this notification referred to as the said Act), the
Government, on the recommendations of the Council, and in supersession of notification of the
Government of India in the Ministry of Finance (Department of Revenue), No. 89/2020 – Central Tax,
dated the 29th November, 2020, published in the Gazette of India, Extraordinary, Part II, Section 3, Subsection (i), vide number G.S.R. 745(E), dated the 29th November, 2020, except as respects things done or
omitted to be done before such supersession, hereby waives the amount of 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 the 21st March, 2020, published in the Gazette of India, Extraordinary,
Part II, Section 3, Sub-section (i), vide number G.S.R. 197(E), dated the 21st March, 2020, between the
period from the 1st day of December, 2020 to the 30th day of September, 2021.

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.

Circular Number 156/12/2021-GST dated 21st June 2021

1. 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. 06/2021-Central
   Tax, dated 30th March 2021, 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 30th June,
   2021, subject to the condition that the said person complies with the provisions of the said
   notification from 1st July, 2021. Further, various issues on Dynamic QR Code have been
   clarified vide Circular No. 146/2/2021-GST, dated 23.02.2021.

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 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

Question 1 . Whether Dynamic QR Code is to be provided on an invoice, issued to a person, who has obtained a Unique Identity Number as per the provisions of Sub-Section 9 of Section 25 of CGST Act 2017?

Answer : Any person, who has obtained a Unique Identity Number (UIN) as per the provisions of Sub-Section 9 of Section 25 of CGST Act 2017, is not a “registered person” as per the definition of registered person provided in section 2(94) of the CGST Act 2017. Therefore, any invoice, issued to such person having a UIN, shall be considered as invoice issued for a B2C supply and shall be required to comply with the requirement of Dynamic QR Code.

Question 2: UPI ID is linked to the bank account of the payee/ person collecting money. Whether bank account and IFSC details also need to be provided separately in the Dynamic QR Code along with UPI ID?

Answer : Given that UPI ID is linked to a specific bank account of the payee/ person collecting money, separate details of bank account and IFSC may not be provided in the Dynamic QR Code.

Question 3: In cases where the payment is collected by some person other than the supplier (ECO or any other person authorized by the supplier on his/ her behalf), whether in such cases, in place of UPI ID of the supplier, the UPI ID of such person, who is authorized to collect the payment on behalf of the supplier, may be provided?

Answer : Yes. In such cases where the payment is collected by some person, authorized by the supplier on his/ her behalf, the UPI ID of such person may be provided in the Dynamic QR Code, instead of UPI ID of the supplier.

Question 4: In cases, where receiver of services is located outside India, and payment is being received by the supplier of services in foreign exchange, through RBI approved modes of payment, but as per provisions of the IGST Act
2017, the place of supply of such services is in India, then such supply of services is not considered as export of
services as per the IGST Act 2017; whether in such cases, the Dynamic QR Code is required on the invoice issued, for such supply of services, to such recipient located outside India?

Answer : No. Wherever an invoice is issued to a recipient located outside India, for supply of services, for which the place of supply is in India, as per the provisions of IGST Act 2017, and the payment is received by the supplier in foreign currency, through RBI approved mediums, such invoice may be issued without having a Dynamic QR Code, as such dynamic QR code cannot be used by the recipient located outside India for making payment to the supplier.

Question 5 : In some instances of retail sales over the counter, the payment from the customer in received on the payment counter by displaying dynamic QR code on digital display, whereas the invoice, along with invoice number, is
generated on the processing system being used by supplier/ merchant after receiving the payment. In such cases, it
may not be possible for the merchant/ supplier to provide details of invoice number in the dynamic QR code
displayed to the customer on payment counter. However, each transaction i.e. receipt of payment from a customer is
having a unique Order ID/ sales reference number, which is linked with the invoice for the said transaction. Whether in such cases, the order ID/reference number of such transaction can be provided in the dynamic QR code displayed digitally, instead of invoice number.

Answer : In such cases, where the invoice number is not available at the time of digital display of dynamic QR code in case of over the counter sales and the invoice number and invoices are generated after receipt of payment, the unique order ID/unique sales reference number, which is uniquely linked to the invoice issued for the said transaction, may be provided in the Dynamic QR Code for digital display, as long as the details of such unique order ID/ sales reference number linkage with the invoice are available on the processing system of the merchant/ supplier and the cross reference of such payment along with unique order ID/ sales reference number are also provided on the invoice.

Question 6 : When part-payment has already been received by the merchant/ supplier, either in advance or by adjustment (e.g. using a voucher, discount coupon etc), before the dynamic QR Code is generated, what amount should be provided in the Dynamic QR Code for “invoice value”?

Answer : The purpose of dynamic QR Code is to enable the recipient/ customer to scan and pay the amount to be paid to the merchant/supplier in respect of the said supply. When the part-payment for any supply has already been received from the customer/ recipient, in form of either advance or adjustment through voucher/discount coupon etc., then the dynamic QR code may provide only the remaining amount payable by the customer/recipient against “invoice value”. The details of total invoice value, along with details/ cross reference of the part payment/ advance/ adjustment done, and the remaining amount to be paid, should be provided on the invoice.

3. Circular No. 146/2/2021-GST, dated 23.02.2021 stands modified to this extent.

10 Points About Dynamic QR Code in GST

Dynamic QR (Quick Reference) code is required to be shown on all Business to Customers Tax invoices issued by a registered taxable person whose turnover exceeds rupees five hundred crores during any of the last three financial years.

1. Is there any difference between the QR code issued for e-invoice and the dynamic QR code?

Yes, there is a difference. Dynamic QR code is issued by taxpayers having turnover above rupees five hundred crores during any of the last three years for business-to-customer transactions. QR code for e-invoice is issued for a taxpayer in relation to business-to-business transactions.

2. From when is dynamic QR Code is applicable?

Initially, a Dynamic QR code is required to be issued from 1^st of April 2020 wide notification number 72/2019 – Central Tax dated 13^th December 2019. It got postponed to 1^st of October 2020 wide notification number 14/2020 central tax, dated 21^st March 2020, due to the pandemic-like situation and business were not ready to implement the same technologically. The same got postponed to 1^st Dec 2020 wide notification number 71/2020 – central tax dated 1^st Dec 2020.

As part of providing relief to the taxpayers, notification number 89/2020 – central tax dated 29^th Dec 2020 issued waving of penalty under Section 125 of the CGST Act 2017 from 1^st December 2020 to 31^st march 2021 in case if the taxpayers’ issues tax invoices without dynamic, quick reference code for business-to-customer transactions.

From 1^st of April 2021, all taxpayers having aggregate turnover above rupees five hundred crores must issue dynamic, quick reference code for business to customer transactions.

3. Why did the Government introduce the Dynamic Quick Reference Code?

The Government has issued the dynamic, quick reference code to track the invoices and payments received against such invoices.

4. What should be shown in the dynamic QR code?

The dynamic QR code should show the following information

• Supplier GSTIN number
• Supplier UPI ID
• Payee’s Bank A/C number and IFSC
• Invoice number & invoice date,
• Total Invoice Value and
• GST amount along with breakup, i.e., CGST, SGST, IGST, CESS, etc.

 The dynamic QR code generated should have the facility for the customer to make digital payment.

5. Dynamic QR codes should be generated for which documents?

Dynamic QR code has to be generated for only tax invoices only as per notification number 72/2019 – Central Tax dated 13^th December 2019.

6. In the case of exports, the overseas customer does not have a GSTIN number. Dynamic QR code has to be issued for export transactions?

No, a dynamic QR code is not required to be issued for the export invoices as e-invoice is being already issued for such transactions.

7. In multiple instances, we could see the suppliers or the retailers displays the QR code for enabling the payment by the customers. In such cases, also the Dynamic QR code has to be printed on the tax invoice?

As long as the supplier maintains the payment track, issuing tax invoices with dynamic QR codes for Business to customer transactions is not required.

The payment reference should be linked to the tax invoice/transaction id, date, time and amount of payment, mode of payment like UPI, Credit card, Debit card, online banking etc.

8. There are instances where the customers pay the retailers in cash; even in such cases, dynamic QR code has to be provided?

No, if the customer opts to pay the invoice in cash, it is not required in such cases, but the retailer has to maintain the cross-reference of the same.

9. In some instances, we come across where the retailer collects the payment before the issue of tax invoice, like sharing the OTP in case of Paytm or making payment through a link. Even in such cases, the retailer has to issue a Dynamic QR code?

In such cases, the retailer is not required to issue the tax invoice with a dynamic QR code as the payment is collected before the invoice is issued and cross-reference for the payment and invoice already exist.

10. In case of cash on delivery by the e-commerce operators or supplies made through e-commerce operations, does the tax invoice issues should have the Dynamic QR code?

In the case of supplies through e-commerce operators by e-commerce operators for cash on delivery termed as COD basis, a Dynamic QR code must be issued and printed on the tax invoice.

The Government has provided multiple postponements for the Dynamic QR code rollout, and now it is mandatory to be issued from 1^st April 2021. If the taxpayers do not follow the same, then the department officers can issue penalty under Section 122 and Section 125 of the CGST Act 2017. Going by the trend of issue of e-invoice where the threshold has been reduced from rupees five hundred crores as on 1^st Oct 2020 to rupees 50 crores from 1^st April 2021, the threshold for the issue of dynamic QR code can also be reduced going forward. Based on past experiences, the taxpayers should gear up for the same even though it is not applicable as on date.