Dynamic QR code on GST B2C invoices
QR code stands for Quick response code which is a type of matrix [two-dimensional] barcode. It stores information as a series of pixels in a square-shaped grid and enables quick retrieval of data. QR codes can be digitally scanned by devices such as mobile phones.
Dynamic QR code on B2C invoices, is a revolutionary change which was intended to be introduced along with e-invoicing. It was announced to be applicable from 01.10.2020 as per the initial CGST Notification 14/2020 dt.21.03.2020. The implementation date was subsequently deferred by amending it as 01.12.2020 vide CGST Notification 71/2020 dt.30.09.2020. So, with this initiative GST has mandated generation of Dynamic QR code for B2C invoices by larger entities to promote digital and cashless economy.
The provision also came with an exception that if Dynamic QR code is digitally displayed and cross reference of payment made using such Dynamic QR code is mentioned on the invoice then such invoices are deemed to be in accordance with the provision.
Dynamic QR Code in context of GST
Dynamic QR code is a type QR code which would contain a web page address (URL) in it. On scanning such code, the said link redirects it to the designated web page. The content present in such page are not static. And the persons authorized in this regard can have access to edit, modify and remove the content on the websites. Hence the destination data is said to be dynamic, and one can access the most updated data on scanning such QR code. Hence named as Dynamic QR code
But in context of GST, one can say that Dynamic QR code refers to transaction based QR codes which varies from one document to another. Because the said QR codes are formed using unique combinations of multiple parameters like invoice number, invoice date, item level details, customer details and so on.
Let us analyse this with an example
On 1.4.2021, M/s ABC Pvt Ltd issue invoice 001/2021 to Mr.X for supply of Goods- P and Qty-5
On 5.4.2021, M/s ABC Pvt Ltd issue invoice 213/2021 to Mr.X for supply of Goods- Q and Qty-7
Perhaps even with sole criteria of invoice number there cannot be any duplication in the Dynamic QR codes generated for each of the above said transactions. Because there are no chance in GST for usage of single invoice number more than once in a financial year.
As we think further, we realize that duplication is not practically possible with the simplest combination of components like document type, invoice number, invoice date and customer information. Hence the transaction based QR code resulting from such combinations are unique and dynamic.
Besides, it is also mandated under GST provisions that B2C Dynamic QR codes should be designed in such a way so as to facilitate digital payment.
Let us have a look at the below Q and A’s to get detailed understanding about the applicability of said provisions in terms of entity, time, criteria and so on:
1.To which GST taxpayers are these provisions applicable?
All entities with turnover exceeding 500 crores must print Dynamic QR code on B2C invoices
2.Which financial year turnover needs to be checked for deciding upon the applicability?
If turnover in any of the preceding financial year since inception of GST meets the criteria, then provisions are said to be applicable
3.Is turnover mentioned in the provisions refers to GSTIN based turnover or PAN based turnover?
Applicability is based on PAN based turnover
4.From when the provision is applicable?
It has been made applicable from 01-12-2020
5.Who are exempted from complying the said provisions?
a.Insurer, banking company, financial institution, including a non-banking financial company
b.Goods transport agency supplying services in relation to transportation of goods by road in a goods carriage
c.Service of passenger transportation
d.Services by way of admission to exhibition of cinematograph films in multiplex screens
e.OIDAR- Online information and database access or retrieval services
6.What was the relaxation provided in penalty as per Notification no. 89/2020 dt.29.11.2020?
If a person complies with the provision from 1.4.2021 (i.e., from FY 2021-2022) onwards, then penalty leviable for non-compliance of provision between 1.12.2020 to 31.3.2021 would be waived off.
Recent Clarifications provided vide Circular no. 146/02/2021-GST
- B2C QR code does not apply to Export invoices as they are already covered under e-invoicing (Deemed classification under B2B)
- Information to be contained in QR code
→ Supplier GSTIN number
→ Supplier UPI ID
→ ayee’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.
It also requires the Dynamic QR Code to be designed in a way so as to enable digital payments through scanning such QR codes.
The provision is deemed to be complied:
- Whenever Dynamic QR code is printed on the invoice OR
- Whenever Dynamic QR code is digitally displayed and
→ Customer pays using various modes of payment with or without using Dynamic QR code and supplier mentions such cross reference of payment** on the invoice
→ Customer pays using cash without using Dynamic QR code and supplier mentions the amount paid in cash and date
** cross reference of payment-Date, time, and mode of payment along with transaction ID
- Wherever Electronic mode of payments are facilitated by suppliers through mobile applications or computer-based applications facilitating display of both merchant and transaction information, the provision is deemed to be complied even in the absence of dynamic QR code, if cross reference of such payment is mentioned on the invoice. In cases where payments are post generation of invoices then one must print Dynamic QR code on the invoices
- For prepaid invoices if cross reference of payment is mentioned on the invoice subsequently generated then it is deemed to be compliance of provisions of the Act
- In case of supply through e-commerce operator, if the original supplier (being liable to comply with Dynamic B2C QR code provisions) mentions the cross reference of payments on the invoice, then it is deemed to be compliance of the provision. But it is emphasised that wherever payment is post invoice generation, printing of Dynamic QR code on invoice in mandatory.
Likewise, this initiative is expected to boost the ideas of cashless and digital economy which is heavily promoted by the Union government. In addition to that, it would strengthen government’s hold on information pertaining to B2C transactions, which would in turn enable easy tracking and monitoring. On the other hand, the recipients could easily retrieve invoice information just by scanning the QR code and get benefitted with faster and more accurate digital payment options.