Avalara > Blog > Goods and Services Tax > CBIC waives off penalty for not capturing dynamic QR code on B2C transactions till 30th September 2021

CBIC waives off penalty for not capturing dynamic QR code on B2C transactions till 30th September 2021

  • Jul 6, 2021 | Ashlesha Vaze

The Ministry of Finance announced through a notification in the Gazette (No. 28/2021 – Central Tax) dated 30th June 2021 that the liability of penalty for non-compliance of the requirement of disclosing QR codes on the invoice of B2C transactions of registered taxpayers with an aggregate turnover more than INR 500 Crores to be deferred further till 30th September 2021. 

The topics of B2C transactions and QR codes first became a topic of discussion when the government introduced the tax reform of E-invoicing to the Indirect Tax Administration of India. This reform was to bring a change in the management of taxes trying to remove the possibilities of tax evasion and omission by error.

What are B2C transactions?

B2C transactions include the supply of goods and services to unregistered clients or end consumers who will not take any input tax credit on these transactions.

What is a QR code and a Dynamic QR code? 

QR code (quick response code) is a unique barcode that is generated on the invoice registration portal. There are two types of QR codes: static and dynamic. When a person who is required to comply with the provisions of e-invoicing, generates an E-invoice for B2B transactions, a static QR code is automatically generated. It stores important transaction details like GSTin of the supplier, recipient, IRN number, etc. Once generated, the details of the transaction like GSTin of the recipient can not be changed in case of a static QR code. 

A dynamic QR code on the other hand has a URL embedded in it along with information like supplier details and UPI id. When a person scans the code, they are redirected to the payment gateway. The user can pay without having to enter other details. A dynamic QR code can not be generated on the invoice registration portal. It is self-generated and one needs to use their own QR code generators or software like Avalara E-Invoicing Solution to generate them.

What is everyone suddenly talking about B2C transactions and Dynamic QR code?

When the government introduced e-invoicing, it was mandatory for all the registered taxpayers to whom the e-invoicing provisions were applicable to disclose Dynamic QR code on their invoices for B2B transactions i.e., all transactions that involve supply of goods and services to another registered person.

Along with that, the provisions also required all registered taxpayers with a turnover of INR 500 Crores and more to disclose the QR codes on B2C transactions as well. There was a penalty for its non-compliance and was to be effective from 1st December 2020, which was further delayed to 1st April 2021. However, another GST (Goods & Services Tax) notification released on 30/03/2021 (GST Notification 06/2021) stated that the penalty payable for non-compliance of this requirement of mentioning the QR code on B2C transactions will further be waived until 30th June 2021.

What is new?

According to the latest notification by the Ministry of Finance dating 30th June 2021 (GST Notification 28/2021) the penalty for non-compliance of the provisions of the notification regarding mentioning the Dynamic QR code in B2C transactions, has been waived off further till 30th September 2021.

Since the penalty has been waived off, capturing the machine-readable dynamic QR code shall also be deferred till 30th September 2021.

You can read the fundamentals of dynamic QR code under B2C E-Invoicing here as well some frequently asked questions here.

Avalara helps businesses of all sizes get GST return filing, e-way bill generation and e-invoicing right with cloud-based GST compliance solutions in India. Goods and Services Tax (GST) rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Ashlesha Vaze
Avalara Author Ashlesha Vaze
Ashlesha has a writing experience of more than 6 years. She has written extensively about business, commerce, finance, law, technology and education. She did her Bachelor's in Commerce with Taxation as a special subject. She also holds a Master's in Media and Communications from Savitribai Phule Pune University. In her free time, you’d find her working for stray animals and writing stories for children.

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