NOVEMBER 20, 2020

By BK Prakash, Xiaomi Technology India Private Limited

WHILE Tax payers appreciate the Government initiative to provide the QR code on the Invoices with an objective to encourage the customers to make digital payment but the tax payers are still awaiting for more clarity from the Board as to the contents of the information to be provided under the QR Code. During this Covind-19 Pandemic toughest situation, the additional ask for mandatory printing of QR code on the Invoices issued to B2C transactions is the new challenge.

As per Notification 14/2020-Central Tax, dated 21st March, 2020, all the taxpayers whose aggregated annual turnover over Rs.500 Crore Rupees other than those referred to in sub-rules (2), (3), (4) and (4A) of rule 54 of said rules, and registered person referred to in section 14 of the Integrated Goods and Services Tax Act, 2017, to an unregistered person (hereinafter referred to as B2C invoice), shall have Dynamic Quick Response (QR) code, Provided that where such registered person makes 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. This new requirement was supposed to be effective from 1st October, 2020 but CBIC thankfully extended the same with effective from 1st of December, 2020 vide Notification No. 71/2020 Central Tax dated 30th September, 2020. The extension has certainly given sign a short term relief to the tax payers and amid this extended notification, the Board is yet to provide the detailed clarification and tax payers are still under dilemma.

Further to the FAQ's issued by GSTN regarding Self-generated Dynamic QR Code on B2C Invoices wherein the intention and purpose behind this new requirement is to encourage the Digital payments whereby buyer can scan the dynamic QR code and make payment from mobile wallet directly. In the said FAQ's it was also clarified that it has no relevance or connection with e-invoicing mandated for B2B Supplies and Exports by notified class of taxpayers. Further in the said FAQ's it was also clarified that QR to be generated by supplier himself either on Point of Sale of machine or on the Invoice issued.

The taxpayers who are engaged in the business of Online sales are already providing the various options (which also includes QR Code) to the consumer while choosing to make the payment viz.,

- Payment by Net Banking

- Payment by Credit Card or Debit Card

- Payment through Wallets such as Paytm, Mobilink, Phonepe, freecharge etc and also an option to pay the amount by using "QR Code"

- Payment by EMI Option against various valid Credit Cards

- Payment by cardless EMI

- Payment against Cash on delivery (COD)

The new requirement of providing QR code on Invoices related to B2C supplies is already adopted by most of the online sellers, therefore providing the QR Code additionally on the B2C invoices (for unregistered buyers) and also on the Point of Sale machine (POS) is not necessary especially when the Customer already chosen option of COD by ignoring the various other options made available at the time of placing the order.

Majority of the online purchases by customers are under pre-paid mode barring few transaction which are against COD. When the taxpayers under e-commerce platform especially provided with various options as mentioned above but still opts for payment against COD and with the acceptance of such terms of payment, the QR code provided either on the invoice or on the POS machine may not meet the desired purpose.

Therefore it is requested that clarification may kindly be issued especially for the online suppliers who have already provided the QR code to the customer for online purchases in their respective portals, the printing of QR code or carrying digital display of the QR code on the POS machine may be an optional instead of mandatory.

The earliest clarification in this regard by the Board would help to reduce the unnecessary burden to the tax payers at this critical situation.

[The views expressed are strictly personal.]