E-invoice B2C QR Code: Applicability, Penalty, Contents, Generation, Exemption List

B2C QR Code was made mandatory by the government as per GST Notification 14/2020-Central Tax dated 23-03-2020. The e-invoice mandate concerned businesses that earned over INR 500 crores in a year. It required them to display a QR code on every B2C e-invoice under GST along with B2B invoices.

The rule was supposed to come into effect from October 1st, 2020 but was then postponed to December 1st, 2020 as per the GST Notification 71/2020-Central Tax dated 30-09-2020.

The penalty for non-compliance with dynamic QR Code on B2C transactions was waived from 1st December 2020 till 31st March 2021 provided compliance with the said provision was adhered to from 1st April 2021 as per the GST notification 89/2020-Central Tax, dated 29-11-2020. However, this was further waived till 30th June 2021, subject to compliance from 1st July 2021 as per the GST Notification 06/2021 released on 30-03-2021.

What is e-invoicing under GST?

E-invoicing under GST is a system that helps in authenticating all B2B and export invoices with a GSTN-authorised Invoice Registration Portal like IRIS IRP. It primarily concerns only B2B invoices and other specified invoices but the mandate requires entities with an AATO of Rs. 500 Cr. or more to display a QR Code on B2C invoices as well.

As the economy began to flourish post the COVID-19 pandemic, the e-invoicing system proved to be a boon. While it significantly reduced tax leakage and fraud, it provided several other benefits to the industry. You can read more about how e-invoices under GST are helping the country here.

B2C QR Code Applicability

If a business makes supplies to consumers or end users, the invoices generated in this regard are considered to be B2C Invoices. Basically, they are the invoices where the end-user will not be claiming ITC, or Input Tax Credit. Although B2C invoices, for now, have an exemption from e-invoicing, businesses with an AATO of Rs. 500 Cr. or more are required to generate dynamic QR codes on all B2C invoices. This was made mandatory with GST Notification No. 14/2020 - Central Tax, as amended by GST Notification No. 71/2020-Central Tax.

Penalty for non-compliance with B2C QR Code for e-invoicing?

As per GST Notification No. 14/2020, the B2C QR Code is mandatory on invoices for taxpayers having AATO of Rs. 500 Cr. only. It came into effect on December 1, 2020 after being deferred from the initial date of October 1, 2020 by GST Notification No. 71/2020.

For non-compliance, the penalty was waived until March 31, 2021. However, failure to comply with the mandate post-April 1, 2021 would attract a penalty of INR 25,000 as per Section 125 of the GST Act.

You can read more about the notifications concerning e-invoicing under GST here.

What does the B2C QR Code contain?

A Quick Response Code (QR Code) contains the details of an e-invoice in an encrypted format. It can be scanned and decrypted by a mobile device. Unlike B2B invoices, the B2C QR Code is NOT generated by the Invoice Registration Portal (IRP). If a taxpayer attempts to upload a B2C invoice to the IRP, it will be rejected automatically. Thus, the B2C QR Code must be self-generated by the taxpayer.

Since the IRP does not come into the picture, the B2C invoice will not have an Invoice Reference Number which is mandatory for B2B invoices and Export invoices.

The B2C QR Code will contain the following details:

1. Supplier GSTIN number
2. Supplier UPI ID
3. Payee’s Bank account details
4. Invoice number & invoice date
5. Total Invoice Value
6. CGST, SGST, IGST, Cess, if applicable.

What is a Dynamic QR Code?

A dynamic QR code, as the name suggests, offers a little more flexibility. It can be edited for additional features. Some of them are:

1. Password Protection
2. Access Management
3. Device-based Redirection
4. Scan Analytics

A static QR Code is widely used for payments via UPI. The customer must scan the QR Code, enter the payment amount and then proceed to pay. With a dynamic QR code, however, details like the merchant’s name and payment details are displayed automatically and the customer only needs to pay.

Who is exempt from generating B2C QR codes on invoices?

The following entities are not required to generate a QR code on their B2C invoices:

1. Insurance Companies
2. Banks
3. NBFCs
4. Financial Institutions
5. Goods Transport Company
6. Passenger Ticketing (Transport Business)
7. Movie Ticketing (Multiplex)
8. NRIs making Online Information Database Access and Retrieval services.
9. Export Transactions covered under e-invoicing

How to generate a Dynamic QR Code for B2C transactions?

The RBI has advised using the UPI or Bharat QR codes, which are both standard and interoperable. By March 2022, companies that use proprietary QR Codes must switch to one of the standard codes. The organisation needs to choose between using UPI and Bharat QR codes for its strategy. UPI might be simple to set up, but it might not enable transactions with a lot of high-value transactions. Although Bharat QR Code allows for the addition of more content, fewer banks than those with UPI capability have already adopted the option to issue QR Codes.

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With IRIS IRP, you can prepare a single e-invoice via our tool or bulk generate IRN through the excel utility, pull IRN in your ERP via API Integration or custom print invoices using an awesome cloud platform!