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E-invoicing is an electronic invoicing system under which GSTN electronically authenticates all B2B invoices. A unique number is issued for each invoice uploaded on the Invoice Registration Portal (IRP). The invoice information is transferred in real-time from the IRP to the GST portal and the e-way bill portal. Although e-invoicing applies only to B2B invoices, the law requires certain entities to generate and print a dynamic QR code for B2C invoices.
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30th June 2021
The CBIC has issued a notification seeking to waive the penalty imposed on non-compliance of dynamic QR code provisions for B2C invoices between 1st December 2020 and 30th September 2021.
30th March 2021
The CBIC has issued a notification seeking to waive the penalty imposed on non-compliance of dynamic QR code provisions for B2C invoices between 1st December 2020 and 30th June 2021, provided the said person complies with the provisions of the said notification from 1st July 2021.
All supplies made to unregistered persons or consumers are referred to as B2C transactions. B2C invoices are those invoices where the end-user will not be claiming input tax credit (ITC). As of now, B2C invoices are exempt from e-invoicing. However, a taxpayer is required to generate a dynamic QR code for enabling digital payments on all B2C invoices as per Notification No. 14/2020-Central Tax, as amended by Notification No. 71/2020-Central Tax.
The notifications have directed all taxpayers with an annual turnover of more than Rs.500 crore in any preceding financial year (starting from 2017-18) are compulsorily required to generate QR code on their B2C invoices from 1st December 2020 (initially was from 1st October 2020 but was deferred by the Notification No. 71/2020).
Further, the CGST Notification no. 89/2020 dated 29th November 2020 waived the penalty leviable on non-compliance of this requirement from 1st December 2020 up to 31st March 2021. Any failure to comply from 1st April 2021 shall attract penalty of Rs.25,000 leviable for incorrect invoicing under Section 125 of the CGST Act.
A QR code is a quick response code. It contains coded information about an e-invoice. It is a two-dimensional version of a barcode and can be scanned from any mobile device. B2C QR code has to be self-generated by the taxpayer. For B2C invoices, IRN generation is not required. If a B2C invoice is sent to IRP, it will be automatically rejected, and if sent multiple times, then the IRN generation for that taxpayer can be blocked. Thus, the main motto of generating QR codes for B2C e-invoices is to promote digitalisation of payments using any UPI.
Dynamic QR code – A dynamic QR code is editable and allows additional features such as scan analytics, password protection, device-based redirection and access management. It provides a less dense QR code image, which is more reliable to scan.
Exempted suppliers include – insurance company, a banking company or financial institution, a non-banking financial company, a goods transport agency, passenger tickets by transport business, movie tickets by multiplex screens, and non-residents making Online Information Database Access and Retrieval services.
Export of goods or services to unregistered persons do not require dynamic QR code as these are considered B2B transactions and e-Invoicing shall apply.
Under B2B invoices, QR codes are generated by the IRP and not the taxpayer. However, under B2C invoices, a taxpayer can generate QR code using their own QR code generating machines and algorithms.
A regular B2B QR code must contain the following details:
The scanning of the dynamic QR code should allow the digital payment by the customer.
Same details are required for B2C QR codes as well, except:
Implementation of QR code on B2C invoices will enable the government to get hold over B2C transactions. Also, it promotes the digitalisation of payments. One can make payments using UPI in a single go. One need not enter the amount, enter the UPI PIN/password and the payment will be made as per the amount mentioned on the e-invoice.
The formats of a B2C invoice containing the dynamic QR code is given below:
Yes. If a supplier has issued an invoice containing a Dynamic QR Code, the invoice will be deemed to have complied with the Dynamic QR Code requirements
In the following cases, if the supplier has digitally displayed the Dynamic QR Code, the requirement will be said to be complied with, if-
As long as a cross-reference can be provided on the invoice about the payment made using such electronic modes of payment, the invoice will be deemed to have complied with the Dynamic QR Code requirements. But if payment is made later on after issuing the invoice, then the dynamic QR code must be displayed on it.
No, generation/printing of the Dynamic QR Code is not required in cases where payment is made before the issuance of the invoice. However, a cross-reference needs to be provided on the invoice, of the payment made through cash/electronic mode or a combination of both. Having satisfied these conditions, the invoice will be deemed to be compliant with Dynamic QR Code requirements. On the other hand, if payment is made later on after issuing the invoice, then the dynamic QR code must be displayed on it.
The Dynamic QR Code requirements will apply to each supplier individually. Hence, if a supplier is able to provide a cross-reference of the payment received with regard to an invoice, on the said invoice, then the invoice will be deemed to be compliant with Dynamic QR Code requirements. But if payment is made later on such as COD after issuing the invoice, then the dynamic QR code must be displayed on it.