QR Code for B2C Invoices has become important in the current scenario when the e-invoicing system is implemented for taxpayers with turnover over INR 500 cr. from October 1, 2020.
As per GST Notification 14/2020-Central Tax date. 23-03-2020, the government has made it mandatory for notified taxpayers (turnover over Rs. 500 Cr.) to display QR codes even on their B2C invoices. And as per GST Notification 71/2020-Central Tax dated 30-09-2020, the requirement of Dynamic QR Code on B2C invoices was deferred to 1st December 2020.
Read more about E-Invoicing and E-Way Bill here.
IRN for B2C Invoices under GST
Transactions involving supplies made to unregistered persons or consumers are generally referred to as Business to Customer (B2C) transactions. B2C Invoices are those invoices where the end-user will not be claiming Input Tax Credit (ITC) from GSTN. While B2B transactions i.e. invoices raised to a registered counterparty are explicitly covered under the current e-invoicing mandate as per GST Notification No.13/2020, it is equally important to understand the effect of e-invoicing under GST on various other business transactions like Exports, Deemed Exports, B2C etc.
The new schema for e-invoicing was released via GST Notification 60/2020-Central Tax dated 30th July 2020 followed by the release of version 1.03 of E-invoicing API specifications. Even though the mandate covers only B2B transactions, the e-invoicing schema notified includes all Invoice Types like Exports, Deemed Exports and B2C transactions as well.
Although the notification on e-invoicing schema has included B2C transactions as Invoice Type, as per e-invoicing mandate and actual API released, IRN generation is not applicable for B2C. Hence taxpayers should not send the B2C invoices to the Government (i.e. IRP). This has been further clarified by NIC that the requests sent with B2C invoices will be rejected by them and if sent multiple times, then the IRN generation can be also be blocked.
Thus for B2C invoices, IRN generation is not required.
Specifications for B2C QR Code
QR Code on B2C invoice is self-generated by the business and there are no standard specifications prescribed by the Government for this. The purpose of having a B2C QR Code is to facilitate digital payments and the RBI recommendations related to streamlining payments also need to be factored in while deciding the approach to define the QR Code for B2C transactions.
Dynamic QR Code and Static QR Code
A QR Code based on the content included in it can be either static or dynamic.
A dynamic QR code is editable, as opposed to a static QR code which cannot be edited. Dynamic QR codes allow for additional features like scan analytics, password protection, device-based redirection, and access management. Dynamic QR codes also result in a less dense QR code image that is more reliable to scan.
How to generate QR Code?
Inferring the various notifications and clarifications issued for QR code on B2C transactions, the following is the gist:
- Enable Scan and Pay Currently many stores like D-Mart, Westside etc have static QR codes at payment counters. The payee needs to scan the code, enter the amount and make payments. However, with dynamic QR codes, details like invoice amount, merchant’s id, merchant’s name, payment details etc can be stored in the QR code itself. So, when the payee scans the QR Code, he/she will be able to directly make the payment through UPI.
- Adopt Interoperable QR Code
The RBI recommendation is to follow either of UPI or Bharat QR codes as these are inter-operable and standard QR codes. Businesses that have adopted proprietary QR Codes, will need to migrate to either of the standard codes by March 2022. Between the UPI and Bharat QR codes, the entity needs to decide about their approach. While UPI may be quick to implement, it may not support very high-value transactions. Bharat QR Code has the flexibility to include more content, however, the number of banks who have already implemented the option to issue QR Code is less than the banks who have UPI capabilities.
A brief comparative matrix is given below:
UPI based QR Code vs Bharat QR Code
| UPI based QR Code | Bharat QR Code |
| Merchant has to have account in the banks live on Bharat QR code (about 190) | Can be issued by member banks (about 32). Merchant has to have account in the banks live on Bharat QR code (about 28) |
| Includes merchant details, bank account etc. | Includes details of merchant, bank account and also transaction details such as amount. |
| Can be static or dynamic | Can be static or dynamic |
| Preferably used for P2P* or P2M* dynamic Transaction using Virtual Payment Address. | Specifically used for P2M* transaction wherein payment is done via cards |
| Necessary to have a mobile number linked |
Generating QR Code – Process Flow:
The Government has not clarified any logic for generating these dynamic QR Codes for B2C invoices however, basic details that are needed in B2B transactions can be stored in the dynamic QR Codes. The Signed QR code for B2B invoices consists of the following information:
- GSTIN of the supplier
- GSTIN of the recipient
- Invoice number is given by the supplier
- Date of the generation of invoice
- Invoice value
- Number of line items
- HSN Code of the main item (the line item having the highest taxable value)
- Unique Invoice Reference Number/Hash
Going in accordance with the IRP Signed QR code, taxpayers can include all above-listed item excluding the GSTIN of the recipient (as here recipient is unregistered) and instead including the name of the recipient. Additional details that need to be there:
- Supplier’s UPI Id
- Other details if any.
This QR code must be displayed on print and PDF invoices. The size of the printed signed QR code can be 2 X 2 inches. However, it depends on the available size on the invoice. But it should be readable from the QR code scanners.
A dynamic QR code that the taxpayers are already making available to the recipient through a digital display, usually also includes a payment link. Thus, on scanning the dynamic QR code, the recipient can directly make payments through such payment links. So, in case the taxpayers do not already have such a dynamic QR code, then the payment link can also be included in the self-generated QR code. If the taxpayers are already generating dynamic QR code with payment information and making it available to the recipient through a digital display, such dynamic QR code will be deemed to be QR code in accordance with the notification.
Notifications and Clarifications around B2C QR Code
| Particulars | Mandate | Clarification | Deferment | Related Mandate |
| Authority /Law | Central Govt, CGST Act | NIC, Developed E-invoice system | Central Govt, CGST Act | RBI |
| Notification /Reference Document | Notification No. 14/2020 | FAQ clarifying queries on B2C QR code | Notification No. 71/2020 | Notification RBI/2020-21/59 |
| Issued On | 21-Mar-20 | 14-Sep-20 | 30-Sep-20 | 22-Oct-20 |
| Scope | •Turnover > ₹ 500 cr in previous FY | •QR code is self-generated. Not by IRN system | •Turnover > ₹ 500 cr in any of previous FY from 2017 | •Streamlining QR Code infrastructure |
| •Dynamic QR code on their B2C invoices | •Many business have static QR code displayed in their outlets. IN static QR code, customer has to key in amount | •Effective 1st Oct 2020 is changed to 1st Dec 2020 | •Either of the two interoperable QR codes to be followed – UPI QR and Bharat QR | |
| •Purpose is to enable digital payments | •Dynamic will make the payments easier as customer just needs to scan, review details and pay. | •Proprietary QR codes shall shift to one or more interoperable QR codes by 31-Mar-2022 |
QR Code on B2C transactions is not new concept and is not related to e-invoice mandate. QR Code requirement had been notified under Income Tax Act and to be followed as per the conditions prescribed. Further with de-monetization, QR code has found its place even in the smallest of tea stalls to large retail outlets.
Notification of B2C under GST rules and the clarifications indicating dynamic QR codes has created quite a stir. Businesses need to weigh the options and keeping the timelines in view, maybe device a short-term and longer-term strategy.
IRIS Onyx – A complete E-invoicing solution
IRIS Onyx is an automated, integrated and seamless e-invoicing solution!
Onyx is a cloud-based solution that can integrate with your billing systems seamlessly in multiple ways and generate IRN with zero disruption to your business. It is a one-stop platform to view, share and collaborate with your customers and suppliers alike while managing the entire communication with the GST systems in a hassle-free manner. IRIS Onyx helps with both IRN along with E-way Bill generation seamlessly and makes the entire process smooth and hassle-free!
At IRIS, we already have built-in features for not just verifying the Signed QR code received from IRP but also self-generating the QR code for B2C invoices sent by the taxpayers.
We M/s DCM Shriram Ltd. are registered as manufacturing company under GST Act 2017 , having turnover of more than 5000 crores. At our works in Kota – Rajasthan we are running workers canteen and also having an employee shop for providing household goods to our workers / staff as a part of HR / IR welfare activities.
For all B2B transactions we are following standard procedures and all invoices are being generated with QR Codes . Do we need QR code on all the bills / invoices issued to our customers ( B2C) who are procuring household goods ( Pulses , Rice , , FMCG items ) from our employee shop . ( This E.shop is not separately registered under GST . )
Kindly suggest … is it actually feasible
Rizwan
rizwanullah@dcmshriram.com
Yes, QR code is required for B2C transactions. Please note CBIC has exempted this QR Code on B2C transactions till 31st March 2021 provided you comply with the same from 1st April 2021
In case you fail to comply from 1st April 2021 penalty will be levied from 1st December
Refer: Notification 89/2020
https://irisgst.com/gst-notifications-and-circulars/