Government Waives penalty for Non- Compliance with QR code provisions for B2C transactions

Last Updated On: Dec. 1, 2020, 9:16 a.m.
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GOVERNMENT WAIVES PENALTY FOR NON- COMPLIANCE WITH QR-CODE PROVISIONS FOR B2C TRANSACTIONS

The Centre has waived penalties for non-compliance with QR code provisions for business-to-consumer (B2C) invoices generated by businesses till March 31, 2021. However, it would be mandatory for businesses to follow the QR code provisions from April 1, 2021, to avail of this penalty waiver.

 

Waiver of penalty pertaining to Dynamic Quick Response (QR) code

On 29th of November, 2020, CBIC issued notification No. 89/2020–Central Tax, which waived the amount of penalty payable by any registered person for non-compliance of the provisions of notification No.14/2020–Central Tax, dated the 21st March, 2020

This penalty was waived from the 1st of December, 2020 to the 31st of March, 2021, subject to the condition that the said person complied with the provisions of the said notification from the 1st of April, 2021.

 

Waived penalty exactly pertains to?

CBIC vide Notification No. 14/2020– Central Tax dated 21st March 2020, had notified that an invoice issued by a registered person, whose aggregate turnover in a financial year exceeded Rs 500 crore to an unregistered person (B2C invoice), shall have Dynamic Quick Response (QR) code.

However, when such registered person made a Dynamic Quick Response (QR) code available to the recipient through a digital display, such B2C invoice issued by such registered person containing cross-reference of the payment using a Dynamic Quick Response (QR) code, shall be deemed to be having Quick Response (QR) code.

 

What does the waived penalty exactly pertain to?

CBIC vide Notification No. 14/2020– Central Tax dated 21st March 2020, had notified that an invoice issued by a registered person, whose aggregate turnover in a financial year exceeded Rs 500 crore to an unregistered person (B2C invoice), shall have Dynamic Quick Response (QR) code.

However, when such registered person made a Dynamic Quick Response (QR) code available to the recipient through a digital display, such B2C invoice issued by such registered person containing cross-reference of the payment using a Dynamic Quick Response (QR) code, shall be deemed to be having Quick Response (QR) code.

 

What do you mean by a Dynamic Quick Response (QR) code?

  • To promote digitization and digital payment, a Dynamic QR code is brought into the picture by the government.
  • A dynamic QR code is a QR code with a short redirection URL encoded in it.
  • The information you are trying to communicate is not 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.
  • Also, that redirection URL can change. Unlike a static QR code, the information in a dynamic QR code can change without needing a new code.

 

What does having a Dynamic Quick Response (QR) code indicate?

It indicates that QR code which is to be printed on the invoices shall have to configured/made by the taxpayer himself and that the Government will not be generating for the taxpayers unlike Invoice Reference Number and QR Code which is generated by Invoice Registration Portal (IRP) for taxpayers falling the requirement of E-Invoicing. The benefits of the Dynamic Quick Response (QR) code are:

  • Every dynamic QR code generated is unique.
  • There is control of the supply value.
  • The payee cannot change the value.
  • The amount can be paid easily by using any UPI app.

 

What data is present in the Dynamic Quick Response (QR) code?

  • Data embedded in Dynamic QR Code is:
  • Merchant’s UPI Id.
  • Merchant’s Name.
  • Merchant Code, if any.
  • Merchant ID, If any.
  • Reference number that may consist of an order number, subscription number, Bill number, booking number, etc.
  • Short Description.
  • Invoice Value.
  • Minimum Amount Payable.

 

Who is not required to display the Dynamic Quick Response (QR) code?

As per said requirement of having QR Code on B2C invoices is not applicable to a registered person referred under sub-rule (2), (3), (4) and (4A) of rule 54 of CGST Rules, 2017.

  • The taxpayers falling under sub-rule (2) of rule 54 are insurers or a banking company or a financial institution, including the non-banking financial companies.
  • The taxpayer falling under sub-rule (3) of said rule is a goods transport agency supplying services in relation to transportation of goods by road in a goods carriage.
  • The taxpayers falling under sub-rule (4) and (4A) are the supplier of passenger transport service and supplier of services by way of admission to an exhibition of cinematograph films on multiple screens. 
  • All other taxpayers except those mentioned above-having aggregate turnover exceeding Rs 500 crore in a financial year shall print QR code on B2C invoices

 

CONCLUSION:

Now, the requirement of having Dynamic Quick Response Code on all B2C invoices to be complied by a taxpayer having turnover more than Rs 500 crore in any preceding financial year from 2017-18 onwards is extended till 31.03.2021. However, a condition is prescribed that w.e.f. 01.04.2021.

The taxpayer shall comply with the requirement of the QR Code on B2C invoices. In case the taxpayer fails to do so then the penalty u/s 125 shall be applicable as per the notification the penalty under section 125 is waived till 31.03.2021 provided the taxpayer complies with the provision from 01.04.2021.

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