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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 17th November, 2021
Circular No. 165/21/2021 - 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
To
The Principal Chief Commissioners / Chief Commissioners / Principal Commissioners / Commissioners of Central Tax (All)
The Principal Directors General / Directors General (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.
Various references have been received from trade and industry seeking further clarification on applicability of Dynamic Quick Response (QR) Code on B2C (Registered person to Customer) invoices for compliance of notification 14/2020-Central Tax, dated 21st March, 2020 as amended. It has been represented that in some cases where, though the service recipient is located outside India and place of supply of the service is in India as per IGST Act 2017, the payment is received by the service provider located in India not in foreign exchange, but through other modes approved by RBI.
In such cases, the supplier will not be fulfilling the condition specified in S. No. 4 of the Circular No. 156/12/2021 dated 21st June 2021, and accordingly, will be required to have dynamic Quick Response (QR) code on the invoice. It has been also represented that relaxation from dynamic QR code on the invoices in such cases should be available if the payment is received through any RBI approved mode of payment, and not necessarily in foreign exchange.
2. 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 hereafter.
3. It is observed that from the present wording of S. No. 4 of Circular No. 156/12/2021 dated 21stJune 2021, doubt arises whether the relaxation from the requirement of dynamic Quick Response (QR) code on the invoices would be available to such supplier, who receives payments from the recipient located outside India through RBI approved modes of payment, but not in foreign exchange. It is mentioned that the intention of clarification as per S. No. 4 in the said circular was not to deny relaxation in those cases, where the payment is received by the supplier as per any RBI approved mode, other than foreign exchange.
4. Accordingly, to clarify the matter further, the Entry at S. No. 4 of the Circular No. 156/12/2021-GST dated 21st June, 2021 is substituted as below:
| 4. | " In cases, where receiver of services is located outside India, and payment is being received by the supplier of services ,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) Quick Response 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 convertible foreign exchange or in Indian Rupees wherever permitted by the RBI, such invoice may be issued without having a Dynamic Quick Response (QR) Code, as such dynamic Quick Response (QR) code cannot be used by the recipient located outside India for making payment to the supplier." |
5. Circular No. 156/12/2021-GST, dated 21.06.2021 stands modified to this extent.
6. It is requested that suitable trade notices may be issued to publicize the contents of this circular.
7. 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)
Principal Commissioner
📚 Frequently Asked Questions (FAQs): Circular No. 165/21/2021 - GST
Q1. What is Circular 165/21/2021-GST about?
Answer:
Circular 165/21/2021-GST clarifies the applicability of Dynamic QR Codes on B2C invoices in certain cross-border service transactions.
It modifies an earlier clarification to confirm that invoices issued to recipients outside India are exempt from Dynamic QR Code requirements when payment is received through RBI-approved modes.
Q2. Why was this circular issued?
Answer:
The circular was issued to remove confusion created by the earlier clarification regarding payments received through RBI-approved modes other than convertible foreign exchange.
It ensures uniform interpretation of Notification No. 14/2020-Central Tax.
Q3. Is Dynamic QR Code required if the customer is located outside India?
Answer:
Generally, no, provided the conditions mentioned in the circular are satisfied.
Where services are supplied to a recipient outside India, the place of supply is in India, and payment is received through RBI-approved modes, Dynamic QR Code is not required.
Q4. Is receipt of payment in foreign exchange mandatory for this relaxation?
Answer:
No.
The circular specifically clarifies that payment received in Indian Rupees, wherever permitted by the RBI, also qualifies for the relaxation.
Q5. Does this apply only to export of services?
Answer:
No.
The clarification specifically addresses situations where the supply is not treated as export of services because the place of supply is in India under the IGST Act, even though the recipient is located outside India.
Q6. Why is Dynamic QR Code not required in these cases?
Answer:
Because the overseas recipient cannot practically use the Dynamic QR Code for making payment to the Indian supplier.
Recognising this practical limitation, CBIC granted the exemption.
Q7. Does this circular modify Circular 156/12/2021-GST?
Answer:
Yes.
Circular 165/21/2021-GST substitutes the clarification appearing at Serial No. 4 of Circular 156/12/2021-GST to remove ambiguity regarding RBI-approved payment modes.
Q8. Does this circular change GST rates or place of supply rules?
Answer:
No.
It only clarifies compliance relating to Dynamic QR Codes and does not amend GST liability, place of supply provisions, or tax rates.
Q9. Which businesses benefit the most from this clarification?
Answer:
Service providers dealing with overseas clients, such as IT companies, consultants, software providers, and professional firms, benefit significantly from this clarification.
It removes unnecessary invoicing compliance where Dynamic QR Codes are not practically useful.
Q10. Does payment in Indian Rupees qualify for the exemption?
Answer:
Yes.
If receipt in Indian Rupees is permitted under RBI regulations, the supplier can avail the relaxation from Dynamic QR Code requirements.
Download PDF: Circular No. 165/21/2021 - GST
More Information: https://taxinformation.cbic.gov.in/
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