The Central Board of Indirect Taxes and Customs (CBIC) has exempted several service providers including banks, financial institutions and exports from using dynamic quick response or QR code on invoices to consumers by companies having aggregate turnover of more than Rs 500 crore.
Non-banking financial companies, insurance companies, banks or financial institutions will not need to provide a QR code on electronic invoices they issue directly to consumers, the Board said in a notification Wednesday.
The Board has exempted exports from QR code since supplies made for exports are treated as business to business supplies.
Suppliers selling through e-commerce portals or apps will have to give cross references of the payment received for their orders on the invoice to ensure compliance with QR Code requirements.
“In cases other than pre-paid supply i.e. where payment is made after generation or issuance of invoice, the supplier shall provide QR Code on the invoice,” the Board said.
The clarifications have been issued, “in order to ensure uniformity in the implementation of the provisions of the law across the field formations,” the Board said, adding that it had examined representations received from the industry that sought clarity on implementation.
The exemption is also applicable on transport agency supplying goods by road, passenger transportation service provider, suppliers of cinematograph in films in multiplex screens and online information data base access and retrieval or OIDAR supplies made by registered entities.
If a supplier displays the QR code, but the customer opts to make payment without using the QR code – either by paying through UPI or by cash – the invoice will be deemed to have complied with the requirements when the supplier provides a cross reference of the payment on the invoice.
In November last year, the Board had waived penalty on non-implementation of QR code which is mandatory for companies over Rs 500 crore turnover, till March 31, 2021, on the condition that compliance will be necessarily undertaken from April 1, 2021. Mandatory QR code for electronic invoices for the set of companies had begun implementation since December 1, 2020.
Industry had flagged issues of systems integration of banks on both buyer and supplier ends in order to integrate acceptance of dynamic QR codes. The systems presently accept static QR codes.
Dynamic QR code for B2C transactions is meant to encourage digital payments by the buyers but can potentially be used to check tax leakages as well. It would have an impact on all consumer facing businesses including retail, restaurants, hotels and so on.
Therefore, industry had sought clarity on several aspects including exemption of dynamic QR code applicability in case of transactions with the customer located outside India.
Source : Times of India