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.

Important changes applicable from 1st of April 2021 in GST

From 1^st April 2021, some changes are being made in Goods and Service Tax which taxpayers have to follow and implement the same.

e-invoice

e-invoice is required to be issued by all registered taxpayers having turnover above rupees fifty crores for all B2B transactions.

• Display of HSN codes on Tax Invoice

Taxpayers having turnover above rupees five crores are required to show six HSN code digits on all tax invoices.

Taxpayers who are having turnover below rupees five crores are required to show four digits of the HSN code in case of B2B (Business to Business) and B2C (Business to Customers) optional to show HSN codes.

• Changes in HSN Summary while filing GSTR – 1

While filing GSTR – 1 on a monthly or quarterly basis, the taxpayers have to report the HSN codes as discussed in Point Number 2 in the HSN Summary that is in Table 12 of GSTR – 1.

Cost of Non-Compliance

The cost of non-compliance is always higher than than the cost of compliance. In case if the taxpayers are not adhering to the above changes, then the department can levy a penalty under Section 125 of CGST Act 2017, residuary penal provision of rupees twenty-five thousand for Central Goods and Service Tax and another twenty-five thousand rupees for the State Goods and Service Tax thereby making the penalty amount to rupees fifty thousand.

Taxpayers are requested to make necessary changes in their business process and accounting or billing software or return filing solutions accordingly else the penalties will be levied.

GST Tip – 464

As per provisions of Rule 18 of the CGST Rules and corresponding State / Union Territory Rules, the taxpayer has to display his certificate of registration and registration number at a prominent location at the principal place of business and at every additional place of business.

As per provisions of Section 125 of the CGST Act, if the taxpayer does not display, a penalty Upto Rs 25,000 can be levied. If the penalty of Rs 15,000 is levied under central tax as a penalty then under state tax also an equivalent  amount of penalty will be levied.

GST TIP – 438

As per Circular No. 33/07/2018-GST dated 23rd Feb 2018, the taxpayer in case utilizes the credit carried forward from the blocked CENVAT Credit from the Electronic Credit Ledger, the same has to be paid with interest and penalty.

GST TIP – 436

As per Circular No. 33/07/2018-GST dated 23rd Feb 2018, in case if the taxpayers utilizes the same and the adjudication is not in favor of the taxpayer, the taxpayer has to pay the amount of the utilized CENVAT Credit in the Electronic Credit Ledger with interest and penalty as per the provisions of the CGST Act.

GST Tip – 399

As per Notification No 56/2017 – Central Tax , GSTR – 3B has to be filed on monthly basis till 31st March 2018. GSTR – 3B has to be used for discharge  liability towards tax, interest, penalty, fees or any other amount payable under GST.

GST Tip – 349

A summary of the order issued under sub-section (9) of section 73 or sub-section (9) of section 74 or sub-section (3) of section 76 shall be uploaded electronically in FORM GST DRC-07, specifying therein the amount of tax, interest and penalty payable by the taxpayer to whom the notice is issued.

GST Tip – 346

When the concerned officer issues notice to the taxable person for not paying or short payment of tax or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any wilful misstatement or suppression of facts to evade tax, if the taxable person pays the interest @ 18% and penalty @25% and intimates the concerned officer in FORM GST DRC-03, then the concerned officer will shall issue an order in FORM GST DRC-05 concluding the proceedings in respect of the said notice.

GST Tip – 345

On payment of penalty and interest on a voluntary basis by the taxpayer before the issue of notice by the concerned tax officer in FORM GST DRC-01, the tax officer will not issue the notice and he will acknowledge the payment of interest and penalty in FORM GST DRC-04.

GST Tip – 344

Before serving of the notice in FORM GST DRC-01 by the tax officer, the taxpayer can pay the taxpayer can pay interest @ 18% as per section 50 of the CGST Act and also a penalty of 15% as per Subsection 5 of section 74 and submit the same to the concerned officer in FORM GST DRC-03.