Dynamic Quick Response (QR) Code on B2C invoices

With the notification issued on 21st March,2020, all the businesses whose turnover exceed 500 Crores in the previous financial year, (starting from 2017-18) were mandated to display QR code on their B2C invoices from 1st December 2020. Then, from October 2022, e-invoicing became mandatory for businesses with an annual turnover exceeding 10 crores.

As per the recent updates, from 1st August 2023, e-invoicing will be essential for all the registered persons whose aggregate turnover (based on PAN) in any prior fiscal year from 2017-18 onwards exceeds 5 crores. 

With e-invoicing already implemented and the new mandate of dynamic QR code B2B supplies, it’s super important to understand the applicability of dynamic code.

Dynamic Quick Response Code on B2C supplies

Quick Response Code is abbreviated as QR code. It is a two-dimensional version of a barcode containing invoice information and can be scanned from any mobile device.

Dynamic QR code is editable and allows additional features such as scan analytics, password protection, device-based redirection and access management.

The whole idea here is to display the code containing the digital payment details that enable the end customers to make the payments by scanning it.

Purpose of Dynamic QR code

The purpose of having a dynamic QR code on B2C invoices is to facilitate digital payments. This in line with the RBI’s recommendations to streamline the payments related to B2C transactions. In other words, it enables the consumers to make payment using UPI by scanning the QR code provided on the invoices.

Type of transactions on which Dynamic QR code needs to be displayed

Dynamic QR code needs to be captured in all the B2C (business to consumers) invoices. In simple words, on all the supplies made by a registered business to unregistered persons, a dynamic QR code needs to be captured.

Type of businesses who need to display dynamic QR code for B2C invoices

All the businesses whose annual turnover exceed 500 crores in any preceding financial year (starting from 2017-18) are mandated to display QR code on their B2C invoices from 1st December 2020.

Parameters/ details to be captured in the Quick Response (QR) Code

Dynamic QR Code should be such that it can be scanned to make a digital payment. The following are the details that need to be captured in dynamic QR code -

• Supplier GSTIN number
• Supplier UPI ID
• Payee’s Bank A/C number and IFSC
• Invoice number & invoice date,
• Total Invoice Value
• GST amount along with breakup i.e. CGST, SGST, IGST, CESS, etc. 

Generating dynamic QR code B2B invoices

Businesses should generate dynamic QR code for B2C invoices using their own QR code generating machines and algorithms. Here, IRN generation is not required and you need not upload B2C invoices to IRP. If uploaded, IRP will reject such invoices.

Business exempted from generating dynamic QR code on B2B invoices

Certain notified businesses are exempted from displaying the dynamic QR code on B2B invoices. Insurance and banking company or financial institution including non-banking financial company, specified transport agency, passenger transport business, multiplex screens, and Online Information Database Access and Retrieval services (OIDAR) supplies made by any registered person to an unregistered person are the businesses/supplies exempted from displaying dynamic QR code.

e-Invoicing Vs dynamic QR code

e-Invoicing system requires businesses to issue an invoice with QR (quick response) code for all B2B supplies. Under this system, the supplier should upload the invoice data to Invoice Registration Portal (IRP) which in turn authenticates the invoice with a unique IRN number along with QR Code. This needs to be captured on the invoice before issuing it. 

Currently, B2C supplies are outside the ambit of e-invoicing concept. To enable digital payments from B2C invoices, the concept of Dynamic Quick Response Code is introduced by the authorities.  Dynamic QR code needs to be generated with the help of their own software or machines/algorithms and then display on the B2C invoice.

Dynamic QR code business scenario  

• If a supplier provides a dynamic QR code, but the customer opts to make a payment without using a dynamic QR code. Will this comply with dynamic code requirements?

Yes. If the supplier has issued an invoice having dynamic QR Code for payment, the said invoice will be deemed to have complied with dynamic QR code requirements

• In cases where the supplier has digitally displayed the Dynamic QR Code and the customer pays for the invoice using any mode like UPI, credit/ debit card or online banking or cash or combination of various modes of payment, with or without using dynamic QR code

It will be deemed to have complied with the requirement of having a Dynamic QR Code if the following conditions are met:

• • if the supplier provides a cross-reference of the payment (transaction id along with the date, time and amount of payment, mode of payment like UPI, Credit card, Debit card, online banking, etc.) on the invoice
    
    
  • where the customer pays in cash, without using Dynamic QR Code and the supplier provides a cross-reference of the amount paid in cash, along with the date of such payment on the invoice.

• If the supplier makes available to customers an electronic mode of payment like UPI Collect, UPI Intent or similar other modes of payment, through mobile applications or computer-based applications, where though dynamic QR code is not displayed, but the details of the merchant as well as the transaction are displayed/ captured otherwise, how can the requirement of dynamic QR code as per this notification be complied with?

In such cases, if the cross-reference of the payment made using such electronic modes of payment is made on the invoice, the invoice shall be deemed to comply with the requirement of dynamic QR code.

However, if payment is made after the generating/issuing invoice, the supplier shall provide dynamic QR Code on the invoice

• Is generation/ printing of dynamic QR code on B2C invoices mandatory for pre-paid invoices i.e. where payment has been made before issuance of the invoice?

If cross-reference of the payment received either through electronic mode or through cash or combination thereof is made on the invoice, then the invoice would be deemed to have complied with the requirement of Dynamic QR Code.

In cases other than pre-paid supply i.e. where payment is made after generation/issuance of invoice, the supplier shall provide Dynamic QR Code on the invoice.

• Would dynamic QR requirement be applicable to export supplies?

Dynamic QR code is not required for exports made by a registered person to an unregistered person. Because exports are under the ambit of e-invoice and you need to issue an e-invoice in line with B2B supplies.

• Once the e-commerce operator (ECO) or the online application has complied with the dynamic QR code requirements, will the suppliers using such an e-commerce portal or application for supplies still be required to comply with the requirement of dynamic QR code?

The requirement dynamic QR code applies to each supplier/registered person separately, if such person is liable to issue invoices with dynamic QR code for B2C supplies as per the said notification.

In case, the supplier is making supply through the e-commerce portal or application, and the said supplier gives cross-references of the payment received in respect of the said supply on the invoice, then such invoices would be deemed to have complied with the requirements of dynamic QR code.

In cases other than pre-paid supply i.e. where payment is made after generation/issuance of invoice, the supplier should provide a dynamic QR code on the invoice.

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