Government Mandate About GST Compliant Dynamic QR Codes – How It Affects Your Business

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Under its ‘Digital India’ flagship program, the Government of India has always promoted cashless transactions with various measures and reforms. The latest inclusion on the line of making India a digitally empowered society is the implementation of GST compliant dynamic QR codes for Consumer transactions.

What is a dynamic QR code?

Unlike a static QR code for payments that does not have a fixed amount assigned to it, a dynamic QR code can be used to accept different amounts from different users.

In terms of the latest update for B2C invoicing, it contains details about the e-invoices. A merchant can generate a unique dynamic QR code for each invoice, which will expire once the payment is received.

The core idea behind including GST compliant dynamic QR codes in B2C invoices is to promote digital payments via any UPI app.

Latest government mandate on using dynamic QR codes for B2C transactions

B2C invoices are the ones that are sent to unregistered consumers. The end-users here will not claim ITC or Input Tax Credit. If you, as a business owner, accept payments digitally, you must know about the latest notification from the Central Board of Indirect Taxes and Customs (CBIC), Ministry of Finance in detail and understand its implications on your business.

As per the CBIC notification F. No. CBEC-20/16/38/2020-GST, it is compulsory for all taxpayers having an annual turnover greater than Rs. 500 crores in any financial year (from 2017-2018) to include a dynamic QR code on the B2C invoices to enable digital payments.

Failing to comply with this mandate from Oct 1, 2021, onwards may attract a penalty of Rs. 25,000 on account of incorrect invoicing u/s 125 of the CGST Act.

Since these dynamic QR codes are to be self-generated by you (taxpayer), you might be wondering how to make these codes GST compliant. Let’s cover that aspect.

How to make a dynamic QR code GST compliant?

As per Notification No. 14/2020-Central Tax, dated March 21, 2020, dynamic QR codes must contain the following information to become GST compliant:

  • Supplier UPI ID
  • Supplier GSTIN Number
  • Invoice number and invoice date
  • Total invoice value
  • Payee’s bank account number with IFSC
  • GST amount with breakup that defines SGST, CGST, IGST, Cess, etc.

Furthermore, scanning the given QR code must allow digital payment transfer by the customer.

How to check if your business must generate GST compliant dynamic QR codes

The notification, as detailed above, is applicable to your business if you issue a tax invoice (B2C invoice) to an unregistered person and the annual aggregate turnover of your business exceeds Rs. 500 crores in any financial year after FY 2017-2018.

How Paytm Dynamic QR Codes make things easier for businesses

Since taxpayers need to generate GST-compliant dynamic QR codes by themselves, you must be looking for an easy way to get it done for B2C invoices.

If your business, as per its annual turnover, falls into the scope of the latest notification, choose Paytm Dynamic QR code as a simplified solution to abide by this mandate. It lets you generate GST compliant dynamic QR codes via API that can be used for B2C invoicing.

Benefits of using GST Compliant Paytm Dynamic QR Codes

  • Each Paytm dynamic QR code you generate will be unique for each transaction
  • You will have complete control over the order amount which cannot be changed by the user while scanning the QR code
  • You can easily display Paytm QR codes on any mobile device
  • You can accept online payments via Paytm or any other UPI app
  • Paytm Dynamic QR integrates seamlessly with your billing POS to help you print invoices with a dynamic QR code

Paytm Dynamic QR Code Demo

How to generate GST compliant Paytm dynamic QR codes for B2C invoices?

 

To generate Paytm Dynamic QR Code, follow the steps given below:

  • Generate authentication keys – a unique MID and a merchant key for secure encryption of payment requests (do not share them with anyone).
  • Create dynamic QR codes using our Create QR Code API.
  • Render the QR code image on B2C invoices for the end-users to scan and make the payments online.

You can check out the detailed documentation about creating QR codes here.

  • Who does not need to generate dynamic QR codes for B2C invoices?

Exempted suppliers include banking companies, insurance companies, financial institutions, NBFCs, and transporters, as detailed above.

  • What will happen if a customer opts to make a payment without using the dynamic QR code printed on the B2C invoice?

As per the clarification given by GST Circular 146/02/2021 dated 23rd February, the invoice having a dynamic QR code will be deemed to have complied with the latest mandate, no matter whether the customers use the codes or not.

  • Suppose a supplier accepts online payments via different modes like UPI Intent, UPI Collect, etc. In such cases, only the merchant details and transactional details are displayed without a dynamic QR code. Does this situation comply with the latest notification about GST compliant Dynamic QR codes?

As long as the supplier provides the cross-reference of the payment details on the invoice (such as transaction ID, amount, date, and payment mode chosen), it will be deemed to have complied with the dynamic QR code mandate.

  • Do suppliers need to generate dynamic QR codes for B2C invoices if the payment has been made even before the invoice is issued?

Generating or printing dynamic QR codes is not required in cases where the suppliers have received the payment before issuing the invoice. However, the cross-reference must be provided on the invoice.

  • I sell through e-commerce marketplaces and other online applications. Do I need to comply with the Dynamic QR code requirements if the marketplace already complies with the same?

The Dynamic QR code mandate applies to every supplier individually. If you provide a cross-reference of the payment received on the said invoice, then it will be deemed to have adhered to the said notification.

However, if the customer chooses to pay later via COD, then the dynamic QR code must be displayed on the invoice issued.

  • Do I need to provide a dynamic QR code on the invoice issued to a person who has obtained UIN as per the provisions of Sub-section 9 of Section 25, CGST Act 2017?

Any individual having a Unique Identity Number (UIN) is not considered a ‘registered person’ as defined in Section 2(94) of the CGST Act, 2017. Hence, any invoice issued to such a person is equivalent to a B2C invoice and thus, requires a dynamic QR code as per the latest CBIC notification.

  • What is e-invoicing?

It refers to the electronic invoicing system under which GSTN authenticates all B2B invoices electronically. The Invoice Registration Portal (IRP) receives the invoice information in real-time, which is then transferred to the GST portal and e-way bill portal.

E-invoicing applies mainly to B2B invoices. However, as per the new notification, certain entities must generate and print dynamic QR codes on all of their B2C invoices.

GST compliant dynamic QR code applicability timeline at a glance

DateUpdate
Mar 23, 2020QR code on e-invoicing implementation deferred to Oct 1, 2020, while the exemption was granted to sectors like insurance, banking, etc.
Sep 30, 2020
  • CBIC notification released which asked for checking aggregate turnover from FY2017-18 till FY2019-20 to check the applicability of e-invoicing
  • Extension of implementing dynamic QR codes for B2C invoices until Dec 1, 2020
Nov 29, 2020Notification issued by CBIC to waive the imposed penalty on non-compliance of dynamic QR code provisions between Dec 1, 2020, and Mar 31, 2021, provided the said individual complies with the provisions from Apr 1, 2021
Mar 30, 2021Notification issued by CBIC to waive the imposed penalty on non-compliance of dynamic QR code provisions between Dec 1,2020 and Jun 30, 2021 provided the said individual complies with the provisions from Jul 1, 2021
Jun 30, 2021Notification issued by CBIC to waive the imposed penalty on non-compliance of dynamic QR code provisions for B2C invoices between Dec 1,2020 and Sep 30, 2021

We, at Paytm, continuously work on building advanced payments products to help you grow your business online and offline.

Switch to Paytm Dynamic QR Codes!

 

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