Understanding GST Circular 156/12/2021: Dynamic QR Code Requirements for B2C Invoices

02March

Understanding GST Circular 156/12/2021: Dynamic QR Code Requirements for B2C Invoices

<h1>Understanding GST Circular 156/12/2021: Dynamic QR Code Requirements for B2C Invoices</h1><p><i>March 1, 2025</i></p><p>The Goods and Services Tax (GST) framework in India continues to evolve with digital initiatives aimed at improving compliance and transparency. One such initiative is the mandatory Dynamic Quick Response (QR) Code requirement for B2C invoices issued by large taxpayers. Let's explore the key clarifications provided in Circular No. 156/12/2021-GST dated June 21, 2021.</p><h2>Background</h2><p>The Central Board of Indirect Taxes and Customs (CBIC) had issued Notification No. 14/2020-Central Tax on March 21, 2020, mandating Dynamic QR Codes on B2C invoices issued by taxpayers with aggregate turnover exceeding ₹500 crore. While the requirement became effective from December 1, 2020, penalty for non-compliance was waived until June 30, 2021, via Notification No. 06/2021-Central Tax.</p><p>The latest circular addresses several practical queries raised by businesses regarding implementation of this requirement.</p><h2>Key Clarifications</h2><h3>1. Applicability to UIN Holders</h3><p><strong>Query:</strong> Are Dynamic QR Codes required on invoices issued to persons with Unique Identity Numbers (UINs)?</p><p><strong>Clarification:</strong> Yes. Entities with UINs (such as embassies, UN organizations) are not considered "registered persons" under Section 2(94) of the CGST Act. Therefore, invoices issued to them are treated as B2C supplies and must include Dynamic QR Codes.</p><h3>2. Bank Account Details with UPI ID</h3><p><strong>Query:</strong> If UPI ID is provided in the Dynamic QR Code, is it necessary to separately include bank account and IFSC details?</p><p><strong>Clarification:</strong> No. Since a UPI ID is already linked to a specific bank account, separate bank account and IFSC details are not required in the Dynamic QR Code.</p><h3>3. Third-Party Payment Collection</h3><p><strong>Query:</strong> When payment is collected by someone other than the supplier (like an E-Commerce Operator), whose UPI ID should be in the QR code?</p><p><strong>Clarification:</strong> The UPI ID of the person authorized to collect payment on behalf of the supplier may be provided in the Dynamic QR Code instead of the supplier's UPI ID.</p><h3>4. International Recipients Paying in Foreign Currency</h3><p><strong>Query:</strong> For services supplied to overseas recipients where place of supply is in India (not considered exports), is a Dynamic QR Code required if payment is received in foreign currency?</p><p><strong>Clarification:</strong> No. When invoices are issued to recipients located outside India (even if place of supply is in India) and payment is received in foreign currency through RBI-approved channels, Dynamic QR Codes are not required as they cannot be used by international recipients.</p><h3>5. Over-the-Counter Retail Sales</h3><p><strong>Query:</strong> In over-the-counter sales where QR code is displayed before invoice generation, can order ID/reference number be provided instead of invoice number?</p><p><strong>Clarification:</strong> Yes. In cases where invoice numbers are generated after payment receipt, merchants can display unique order IDs or sales reference numbers in the Dynamic QR Code, provided these are uniquely linked to the eventual invoice and cross-referenced in the system.</p><h3>6. Partial Payments and Advance Receipts</h3><p><strong>Query:</strong> If partial payment has been received before generating the QR code, what amount should be shown in the code?</p><p><strong>Clarification:</strong> The Dynamic QR Code should only display the remaining amount payable by the customer. However, the invoice must include details of the total invoice value, partial payment/advance received, and the remaining balance due.</p><h2>Implications for Businesses</h2><ol><li><strong>For Entities Dealing with UIN Holders:</strong> Ensure Dynamic QR Codes are included on invoices to embassies, UN bodies, and other UIN holders.</li><li><strong>For E-commerce Platforms:</strong> When collecting payments on behalf of sellers, the platform's UPI ID can be used in the Dynamic QR Code.</li><li><strong>For Exporters of Services:</strong> Relief from QR code requirements when billing foreign clients (even for non-export services) if payment is received in foreign currency.</li><li><strong>For Retail Businesses:</strong> Flexibility to use order references in QR codes displayed at payment counters before invoice generation.</li><li><strong>For Advance Payment Scenarios:</strong> QR codes need only reflect the balance amount payable after accounting for advances or partial payments.</li></ol><p><a href="https://cms.plasament.com/storage/156-12-2021-20gst-20circular.pdf">156-12-2021_20gst_20circular</a><br> </p>

Understanding GST Circular 156/12/2021: Dynamic QR Code Requirements for B2C Invoices

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