QR Code in GST

Introduction

A dynamic QR code is a QR code with a short redirection URL encoded in it. The information you’re trying to communicate isn’t encoded in the QR code itself, like a static QR code. Instead, the information you’re trying to communicate is on a website, and a dynamic QR code redirects to that website.

If you use a dynamic QR code, you can capture where, when, and with what device a code was scanned. The implications for this in marketing campaigns is enormous

During, the 38th meeting of the GST Council, various Automation measures such as e-invoice, new return system, QR code on bills were discussed. Accordingly, the provision related to QR code inserted in rule 46 & 49 vide NN 31/2019 DT. 28.06.2019 which comes into force from the date as notified time to time.

CBIC mandate the requirement of dynamic QR Code on invoice or bill of supply for large taxpayers having A.T.O > 500 Crores w.e.f. 01 DEC 2020.

In Short, person having A.T.O. > 50 Crores* mandate through E – invoicing in case of B2B supply & export supply. In case of B2C supply, mandatory where A.T.O. > 500 Crores.

A dynamic QR Code is mandatory only on invoice. It is not mandatory to have QR Code on Credit Note/Debit Note.

*Limit of 100 Crores reduced to 50 Crores w.e.f. 01 APR 2021.

INVOICE ISSUED BY REGISTERED PERSON HAVING AGGREGATE TURNOVER IN ANY FY EXCEEDING 500 CRORE RUPEES TO AN UNREGISTERED PERSON (B2C INVOICE) SHALL HAVE QUICK RESPONSE (QR) CODE.

MANDATORY FROM 01 DEC 2020

PENALTY WAIVED OFF FOR NON­COMPLIANCE FOR THE PERIOD DEC 20 TO MAR 21.

Difference Between Static QR Code and Dynamic QR Code

Applicability*

1. Person having aggregate turnover exceeds 500 Crores in any preceding fmancial year onwards. or
2. In case of invoices issued to un­registered person i.e. B2C supply.

In case of B2B Supply & Export Supply, QR code will auto generate through E-Invoice portal, in case of person having A.T.O exceeds 50 Crores.

Few Sectors like banking, GTA, passenger transportation etc. are exempted from such provision.

*NN 14/2020 – (CTR) DT. 31.03.2020 amended by NN 71/2020 – (CTR) DT. 30.09.2020.

Dynamic QR Code

Analysis;

• QR Code will auto generate in case of B2B Supply & Export Supply made by person having A.T.O. exceeds 50 Crores.
• QR Code is mandatory only in case of invoices i.e. Tax Invoices.
• QR Code yet to notified in case of exempted supply.
• No power in law to have QR code on credit note or debit note even these are issued for taxable supply.

Norms Relaxed

NN 89/2020 (CT) DT. 29.11.2020, waives the amount of penalty payable by any registered person for non-compliance of not mentioning the QR Code on invoices issued between the period from the 1st day of December, 2020 to the 31st day of March, 2021, subject to the condition that the said person complies with the provisions of the said notification from the 1st day of April, 2021.

Non-Applicability of QR Code

Where the supplier of taxable service is;

a. an insurer or a banking company or a financial institution, including a NBFC;

b. a GTA supplying services in relation to transportation of goods by road in a goods carriage;

c. supplying passenger transportation service.

d. supplying services by way of admission to exhibition of cinematograph in films in multiplex screens.

OIDAR supplies made by any registered person, who has obtained registration under section 14 of the IGST Act 2017, to an unregistered person.

Precautions;

• Parameters to be add in Accounting Software to generate QR Code.
• Ensure QR code on all invoices issued to unregistered supplier.
• In case of Digital Display of QR code, invoice must have cross reference of the payment even it is received in cash.
• No Size limit for QR code on invoice. Generally, 2X2 cm

Parameters/ details are required to be captured in (QR) Code

i. Supplier GSTIN number

ii. Supplier UPI ID

iii. Payee’s Bank A/C number and IFSC

iv. Invoice number & invoice date,

v. Total Invoice Value and

vi. GST amount along with breakup i.e. CGST, SGST, IGST, CESS, etc.

Further, Dynamic QR Code should be such that it can be scanned to make a digital payment.

Clarifications;

If the supplier has issued invoice having Dynamic QR Code for payment, the said invoice shall be deemed to have complied with Dynamic QR Code requirements.

Supplier displayed the QR Code but customer pays:-

a. Online Mode like UPI etc. or

b. Cash or

c. Both

It shall be deemed that compliance have been made if the supplier provides a cross reference of the payment ((transaction id along with date, time and amount of payment, mode of payment) on the invoice.

Updating in A/c Software;

• Audit Trail for each transaction, creating an edit log for each change made in books of account along with dates in Accounting Software as per MCA Norms.
• Recording of IRN in software for both inward & outward supply.
• Parameters to be add in Accounting Software to generate QR Code.
• 6 Digit HSN Code for all supplies but for export is should be 8 digits.

Usage

Largely usage of such practice is likely to be;

• Restaurants/Bar
• Retail Store
• Hotels etc.

Conclusion:

With the use of dynamic QR code, you can capture where, when, and with what device a code was scanned.

Practically, these provisions have larger applicability on restaurants, bars, hotels etc.

As of now, these provision are applicable only on taxpayers having A.T.O is more than 500 Crores. However, few sectors like banking, non-banking financial institution, good transport agency, cinematography film in multiplex are exempted.

Requirement of QR Code is only on tax invoices, not required to have on credit note, debit note or Bill of supply.

Digitally Display of QR Code and have details of cross reference of payment is on invoice shall be deemed to be having QR code.