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CBEC-20/16/38/2020 -GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
New Delhi, dated the 21st June, 2021
Circular no. 156/12/2021 - GST: Clarification in respect of applicability of Dynamic (Quick Response) QR Code on B2C invoices and compliance of notification 14/2020- Central Tax dated 21st March 2020 - Reg.
To
The Principal Chief Commissioners / Chief Commissioners / Principal Commissioners / Commissioners of Central Tax (All)
The Principal Director Generals / Director Generals (All)
Madam/Sir,
Subject: Clarification in respect of applicability of Dynamic (Quick Response) QR Code on B2C invoices and compliance of notification 14/2020- Central Tax dated 21st March, 2020 - Reg.
Notification No. 14/2020-Central Tax, dated 21st March 2020 had been issued which requires Dynamic QR Code on B2C invoice issued by taxpayers having aggregate turnover more than 500 crore rupees, w.e.f. 01.12.2020. Further, vide notification No. 06/2021-Central Tax, dated 30th March 2021, penalty has been waived for non-compliance of the provisions of notification No.14/2020 – Central Tax for the period from 01st December, 2020 to 30th June, 2021, subject to the condition that the said person complies with the provisions of the said notification from 1st July, 2021. Further, various issues on Dynamic QR Code have been clarified vide Circular No. 146/2/2021-GST, dated 23.02.2021.
2. Various references have been received from trade and industry seeking clarification on applicability of Dynamic Quick Response (QR) Code on B2C (Registered person to Customer) invoices and compliance of notification 14/2020-Central Tax, dated 21st March, 2020 as amended. The issues have been examined and in order to ensure uniformity in the implementation of the provisions of the law across the field formations, the Board, in exercise of its powers conferred under section 168(1) of the CGST Act, 2017, hereby clarifies the issues in the table below:
| 1. | Whether Dynamic QR Code is to be provided on an invoice, issued to a person, who has obtained a Unique Identity Number as per the provisions of Sub-Section 9 of Section 25 of CGST Act 2017? | Any person, who has obtained a Unique Identity Number (UIN) as per the provisions of Sub-Section 9 of Section 25 of CGST Act 2017, is not a “registered person” as per the definition of registered person provided in section 2(94) of the CGST Act 2017. Therefore, any invoice, issued to such person having a UIN, shall be considered as invoice issued for a B2C supply and shall be required to comply with the requirement of Dynamic QR Code. |
| 2. | UPI ID is linked to the bank account of the payee/ person collecting money. Whether bank account and IFSC details also need to be provided separately in the Dynamic QR Code along with UPI ID? | Given that UPI ID is linked to a specific bank account of the payee/ person collecting money, separate details of bank account and IFSC may not be provided in the Dynamic QR Code. |
| 3. | In cases where the payment is collected by some person other than the supplier (ECO or any other person authorized by the supplier on his/ her behalf), whether in such cases, in place of UPI ID of the supplier, the UPI ID of such person, who is authorized to collect the payment on behalf of the supplier, may be provided? | Yes. In such cases where the payment is collected by some person, authorized by the supplier on his/ her behalf, the UPI ID of such person may be provided in the Dynamic QR Code, instead of UPI ID of the supplier. |
| 4. | In cases, where receiver of services is located outside India, and payment is being received by the supplier of services in foreign exchange, through RBI approved modes of payment, but as per provisions of the IGST Act 2017, the place of supply of such services is in India, then such supply of services is not considered as export of services as per the IGST Act 2017; whether in such cases, the Dynamic QR Code is required on the invoice issued, for such supply of services, to such recipient located outside India? | No. Wherever an invoice is issued to a recipient located outside India, for supply of services, for which the place of supply is in India, as per the provisions of IGST Act 2017, and the payment is received by the supplier in foreign currency, through RBI approved mediums, such invoice may be issued without having a Dynamic QR Code, as such dynamic QR code cannot be used by the recipient located outside India for making payment to the supplier. |
| 5. | In some instances of retail sales over the counter, the payment from the customer in received on the payment counter by displaying dynamic QR code on digital display, whereas the invoice, along with invoice number, is generated on the processing system being used by supplier/ merchant after receiving the payment. In such cases, it may not be possible for the merchant/ supplier to provide details of invoice number in the dynamic QR code displayed to the customer on payment counter. However, each transaction i.e. receipt of payment from a customer is having a unique Order ID/ sales reference number, which is linked with the invoice for the said transaction. Whether in such cases, the order ID/ reference number of such transaction can be provided in the dynamic QR code displayed digitally, instead of invoice number. | In such cases, where the invoice number is not available at the time of digital display of dynamic QR code in case of over the counter sales and the invoice number and invoices are generated after receipt of payment, the unique order ID/ unique sales reference number, which is uniquely linked to the invoice issued for the said transaction, may be provided in the Dynamic QR Code for digital display, as long as the details of such unique order ID/ sales reference number linkage with the invoice are available on the processing system of the merchant/ supplier and the cross reference of such payment along with unique order ID/ sales reference number are also provided on the invoice. |
| 6. | When part-payment has already been received by the merchant/ supplier, either in advance or by adjustment (e.g. using a voucher, discount coupon etc), before the dynamic QR Code is generated, what amount should be provided in the Dynamic QR Code for “invoice value”? | The purpose of dynamic QR Code is to enable the recipient/ customer to scan and pay the amount to be paid to the merchant/ supplier in respect of the said supply. When the part-payment for any supply has already been received from the customer/ recipient, in form of either advance or adjustment through voucher/ discount coupon etc., then the dynamic QR code may provide only the remaining amount payable by the customer/ recipient against “invoice value”. The details of total invoice value, along with details/ cross reference of the part- payment/ advance/ adjustment done, and the remaining amount to be paid, should be provided on the invoice. |
3. Circular No. 146/2/2021-GST, dated 23.02.2021 stands modified to this extent.
4. It is requested that suitable trade notices may be issued to publicize the contents of this circular.
5. Difficulty, if any, in the implementation of the above instructions may please be brought to the notice of the Board. Hindi version would follow.
(Sanjay Mangal)
Commissioner
📚 Frequently Asked Questions (FAQs): Circular No. 156/12/2021 - GST
Q1: What is Dynamic QR Code under GST?
Answer: Dynamic QR Code is a QR Code used on applicable B2C invoices to facilitate electronic payment by the customer.
Under Notification No. 14/2020-Central Tax, the requirement applied from 1 December 2020 to taxpayers having aggregate turnover exceeding ₹500 crore. Circular No. 156/12/2021-GST subsequently clarified several practical issues around its implementation, including UIN holders, UPI details, authorised payment collectors, retail payments and part-payments.
Q2: Is Dynamic QR Code required on an invoice issued to a UIN holder?
Answer: Yes, where the taxpayer is otherwise covered by the Dynamic QR Code requirement.
A person having a Unique Identity Number under Section 25(9) is not treated as a “registered person” under Section 2(94) of the CGST Act. Therefore, an invoice issued to such a person is treated as a B2C supply and is required to comply with Dynamic QR Code requirements. This is specifically clarified in Circular No. 156/12/2021-GST.
Q3: If UPI ID is provided, must bank account and IFSC also be included in the QR Code?
Answer: No, separate bank account and IFSC details are not required in the Dynamic QR Code when the UPI ID is linked to the relevant bank account.
CBIC clarified that because the UPI ID is linked to a specific bank account of the payee or person collecting the money, separate bank account and IFSC details may not be provided in the Dynamic QR Code. This avoids duplication of payment information while retaining the UPI-based payment facility.
Q4: Can an authorised person's UPI ID be used instead of the supplier's UPI ID?
Answer: Yes, where the person is authorised by the supplier to collect the payment.
For example, if an e-commerce operator or another authorised person collects payment on behalf of the supplier, the Dynamic QR Code can contain that authorised person's UPI ID instead of the supplier's UPI ID. The circular specifically permits this arrangement, provided the person is authorised by the supplier to collect the payment on the supplier's behalf.
Q5: Is Dynamic QR Code required for an overseas customer paying in foreign currency?
Answer: No, in the specific situation covered by Circular No. 156/12/2021-GST.
Where the recipient is located outside India, payment is received by the supplier in foreign currency through RBI-approved modes, and the place of supply is in India, the invoice may be issued without Dynamic QR Code. CBIC noted that the recipient located outside India cannot use the Dynamic QR Code for making the payment to the supplier in this situation.
Q6: What if the invoice is generated after payment at a retail counter?
Answer: A unique Order ID or Sales Reference Number can be used in the Dynamic QR Code instead of the invoice number.
This situation can arise when a customer pays first through a QR Code displayed at the counter and the invoice is generated afterward. CBIC permits the unique Order ID/Sales Reference Number if it is uniquely linked to the invoice in the supplier's processing system. The invoice should also contain the relevant cross-reference of the payment and that unique number.
Q7: What amount should be shown in the QR Code if an advance has already been received?
Answer: The Dynamic QR Code may show only the remaining amount payable by the customer.
For example, if the total invoice value is ₹1 lakh and ₹30,000 has already been received as an advance, the QR Code may show ₹70,000 as the amount payable. However, the invoice should still disclose the total invoice value, details or cross-reference of the advance or adjustment, and the remaining amount payable.
Q8: What if the customer has used a voucher or discount coupon before the QR Code is generated?
Answer: The QR Code may show the amount remaining payable after the relevant adjustment.
CBIC specifically includes adjustments through vouchers or discount coupons within the clarification on part-payments. The Dynamic QR Code can reflect the remaining amount payable rather than the gross invoice amount. The invoice should nevertheless provide the total invoice value and details or cross-reference of the adjustment, together with the remaining amount payable.
Q9: Does the Dynamic QR Code requirement apply to every GST invoice?
Answer: No. The requirement discussed in this circular relates to applicable B2C invoices and taxpayers covered by Notification No. 14/2020-Central Tax.
The notification referred to in the circular applied to taxpayers having aggregate turnover exceeding ₹500 crore from 1 December 2020. Therefore, a business should first establish whether it falls within the scope of the relevant notification before applying the Dynamic QR Code requirements to its invoices.
Q10: Was penalty waived for non-compliance with Dynamic QR Code requirements?
Answer: Yes, penalty was waived for the specified period from 1 December 2020 to 30 June 2021, subject to the stated condition.
Notification No. 06/2021-Central Tax dated 30 March 2021 waived the penalty for non-compliance with Notification No. 14/2020-Central Tax during that period, provided the taxpayer complied with the Dynamic QR Code provisions from 1 July 2021. This was a specific historical relaxation and should not be treated as a permanent exemption.
Q11: Did Circular 156/12/2021 replace the earlier Dynamic QR Code circular?
Answer: It modified Circular No. 146/2/2021-GST to the extent specifically stated in the new circular.
The June 2021 circular notes that several Dynamic QR Code issues had already been clarified through Circular No. 146/2/2021-GST dated 23 February 2021. It then expressly states that Circular No. 146/2/2021-GST stands modified to the extent covered by Circular No. 156/12/2021-GST.
Q12: What is the main practical takeaway from Circular 156/12/2021-GST?
Answer: The Dynamic QR Code should be configured according to the actual payment and invoicing process of the business.
The circular provides specific solutions for situations where a UIN holder is the customer, an authorised person collects payment, an overseas customer pays in foreign currency, the invoice is generated after payment, or part-payment has already been received. The key is to maintain a clear linkage between the payment, QR Code information and final invoice wherever the circular requires it.
Download PDF: Circular No. 156/12/2021 - GST
More Information: https://taxinformation.cbic.gov.in/
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