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Dynamic QR Code for B2C Transactions:

B2C transaction means all the supplies made to unregistered person or consumers. B2C invoices are those invoices where the end user will not be claiming input tax credit.

E-invoicing refers to a method of processing invoices in an electronic format and on a united platform between buyers and suppliers. It is an electronic invoicing system under which GSTN electronically authenticates all B2B invoices. The invoice registration portal which is operated by the GST Network, will assign an identification number against each invoice under an electronic invoicing system. All invoices details will be forwarded in real time from this platform to GST portal. E-invoicing applies only to B2B invoices and as of now B2C invoices are exempt from e- invoicing but now the law requires certain entities to generate dynamic QR code for enabling digital payments on all B2C invoices. It is applicable for B2C transactions not for B2B.

Taxpayers are required to generate dynamic QR code for digital payments on all B2C invoices from 01.12.2020 (Initially was from 01.10.2020 but deferred by the Notification No. 71/2020-Central Tax, dated 30.09.2020)  

Notification No. 14/2020-Central Tax, dated 21.03.2020 – hereby notifies that Dynamic QR code is mandatory on B2C invoices issued by following registered person

  • Registered person(other than those referred in Rule 54(2), (3), (4), (4A))
  • Having aggregate turnover exceeding Rs. 500 crores in any of the  preceding financial years starting from 2017-18

Dynamic QR code on GST B2C

Exception: Registered person making available dynamic QR code available to recipient through digital display-B2C invoice containing cross reference  of the payment using a Dynamic QR Code=Deemed having QR code

Penalty for non compliance of the provision from the said requirement  have been waived , Vide Notification No. 06/2021, Dated 30.03.2021 for the period from the 01.12.2020 to 30.06.2021, subject to the condition that the said person complies with the provisions of the said notification from the 01.07.2021.

Important Point: Further, Vide Notification No. 28/2021-Central Tax, dated 30.06.2021, Penalty for non compliance of the provision from said requirement have been further  waived  for three more months from 01.07.2021 to 30.09.2021. Hence effective period for waiver of penalty  for non compliance of the provision from said requirement is from 01.12.2020 to 30.09.2021

In short, now applicability of Dynamic QR Code provision is extended to 30.09.2021 instead of its applicability from 01.07.2021

Note: Where an entity issued invoices without dynamic code where applicable then such invoices shall not be treated as valid invoice. There shall be a penalty of Rs. 25000 under each head of tax for non issuing the valid invoice

Dynamic Quick Response(QR) Code:

Dynamic QR Code is a functional QR Code that has the flexibility to be updated. It follows a redirection mechanism. It never stores the targeted data directly. It stores a short URL that redirects the end users to the target data. It can be edited anytime. No need to create a new QR code each time you want to change the encoded content. There are many additional features of Dynamic QR code like they allow you to track their scanning activity, add password protection to the encoded data and even captured leads. It provides a less dense QR Code image which is more reliable to scan. It not only captures the information about the supplier but even allow the payee to know the amount to be paid for the given transaction.

In short, Dynamic QR Code mandatory for consumer invoices (B2C invoices). GST parameters will be captured when payment for purchase is made through the QR Code. The main purpose behind the introduction of the QR code in the B2C invoices is to speed up the invoice tracking and payment process. Now, the QR code based invoices can be easily scanned and payment can be made instantly by the customer.

Information required for generating  Dynamic  QR Code:

  • Supplier GSTIN number
  • Supplier UPI ID
  • Payee bank account number and IFSC code
  • Invoice number and invoice date
  • Total invoice value
  • GST amount along with breakup

Exemptions for generating Dynamic QR code for B2C invoices:

As per Notification No. 14/2020-Central Tax, Dated 21.03.2020, Dynamic QR Code is not applicable to an invoice issued in following cases:

where the supplier of taxable services is-

  • An insurer or a banking company or a financial institution including a non banking financial company
  • Goods transport agency supplying services in relation to transportation of goods by road in a goods carriage
  • Supplying passenger transportation services
  • Supplying services by way of admission to exhibition of cinematography 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

As regards the supplies made for exports ,CBIC issued a Circular No. 146/02/2021-GST which clarifies that  though such supplies are made by registered person to unregistered person, However e-invoices are required to be issued in respect of supplies for exports and treating them as B2B supplies as per Notification No. 13/2020-Central Tax, dated 21.03.2020 and  Notification No. 14/2020, Dated 21.03.2020 will not be applicable to them.

For reference, following are the notifications and circulars issued on the Dynamic QR Code:

1. Notification No. 14/2020-Central Tax, dated 21.03.2020 deals with the requirement of Dynamic QR Code

2. Notification No. 71/2020-Central Tax, dated 30.09.2020 deals with amendment in above notification

3. Notification No. 06/2021-Central Tax, dated 30.03.2021 deals with waiver of penalty till 30.06.2021

4. Notification No. 28/2021-Central Tax, dated 30.06.2021 deals with extended period of waiver of penalty for non compliance of provision of Dynamic QR Code till 30.09.2021 instead of its applicability from 01.07.2021

5. Circular No. 146/02/2021-GST, dated 23.02.2021 clarification in respect of Dynamic QR Code and compliance of Notification No. 14/2020- Central Tax, dated 21.03.2020

6. Circular No. 156/12/2021-GST, dated 21.06.2021 latest circular for clarification in respect of Dynamic QR Code and compliance of Notification No. 14/2020- Central Tax, dated 21.03.2020

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May 2024