Dynamic QR code Applicability From 1st July 2021

Dynamic QR code is applicable on B2C supplies from 1st July 2021. B2C supplies are those transactions that are made by a taxpayer to a non-registered taxable person (end consumer). So, in this blog, we will look into the dynamic QR code applicability from 1st July 2021.

What is a Dynamic QR Code? 

The full form of a QR code is a quick response code that contains coded data of an e-invoice. It is a two-dimensional version of a barcode and can be scanned from any mobile device. Dynamic QR codes must be self-generated by the taxpayer. The principle saying of generating dynamic QR codes for B2C e-invoices is to promote digitalization and online payments utilizing any UPI. A dynamic QR code can be edited by the taxpayer to provide value-added features, for example,  

1. Scan password protection,  
2. Device-based redirection, and  
3. Access management. 

Dynamic QR Code Applicability Timeline 

1. Initially CBIC announced to implement Dynamic QR code on B2C invoices from 1st October 2020. 
2. Then CBIC issued Notification No. 14/2020-Central Tax, according to which every taxpayer whose aggregate turnover exceeded INR 500 crore in any preceding financial year needs to compulsorily generate a Dynamic QR code on their B2C invoices from 1st December 2020. 
3. Further CBIC waived off the penalty for the non-compliance for the period from 1st December 2020 to 30th June 2021 due to an unprecedented situation (COVID-19). However, as per Notification No. 06/2021-Central Tax there was a condition that the said taxpayer complies with the dynamic QR code provision from 1st July 2021. 

Issuing a Dynamic QR Code 

A taxpayer can easily issue dynamic QR codes using their system and algorithms. A Dynamic QR Code contains the following data in it: 

1. Invoice number 
2. Invoice date 
3. GSTIN of the Supplier 
4. UPI ID of the supplier 
5. Bank account number of the Payee
6. IFSC of the Payee 
7. Total Invoice Value with GST breakup 

Dynamic QR Code Non-Applicability 

As per Notification No. 14/2020-Central Tax the dynamic QR Code is not applicable where the supplier is: 

1. An insurer; 
2. A banking company; 
3. A financial institution including a non-banking financial company (NBFC); 
4. A GTA supplying goods; 
5. Supplying services via multiplex screens 
6. Providing passenger transportation service; 
7. Providing any OIDAR supplies  

Dynamic QR Code Applicability on Exports 

The concept of dynamic QR codes does not apply to the exports of goods or/and services. However, the exporter needs to issue an e-invoice and treat them as B2B supplies.  

Deemed Compliance of Dynamic QR Code

If an invoice is issued with a dynamic QR code, then it shall be treated as deemed compliance with the dynamic QR code. In cases, if a supplier shows a dynamic QR code digitally and the customer pays for the invoice: 

1. Using any mode like UPI, credit/debit card or online banking or a mix of different modes of payment, with or without utilizing Dynamic QR Code, and the supplier provides a cross-reference of the payment (exchange ID alongside date, time, and measure of payment, mode of payment like UPI, Credit card, Debit card, online banking, etc.) on the invoice; or  
2. In case, if a taxpayer pays through cash without utilizing Dynamic QR Code and the supplier provides a cross-reference of the sum paid in real money, alongside the date of such payment on the invoice; 

The said invoice will be deemed to have complied with the requirement of having a Dynamic QR Code.