E-invoice is an electronic invoicing system designated by the government portal website to electronically authenticate all B2B invoices. A unique Invoice Reference Number (IRN) is issued for each invoice uploaded to the Invoice Registration Portal (IRP). The information contained in the invoice is transmitted from the IRP to the GST portal and the electronic waybill portal in real time. Although electronic invoices are suitable for B2B invoices, the GST law requires certain entities to generate and print QR codes for B2C invoices.
From October 1, 2020, the Central Indirect Tax and Customs Commission (CBIC) will mandate electronic invoices for taxpayers with a total turnover of more than 5 billion Indian rupees in the previous fiscal year. All these taxpayers need to issue electronic invoices for B2B tax invoices, credit notes and debit notes. The electronic invoice system also requires a QR code space for printed invoices. Even for export and RCM supply, due to the need to issue tax invoices, QR codes are also applicable.
CBIC issued a notice stating that from December 1, 2020, all companies with a turnover of more than 5 billion Indian rupees must generate dynamic QR codes for all B2C transactions. Please note that supplies provided to unregistered persons or consumers are referred to as B2C transactions, and end users will not be able to claim input tax credits (ITC).
It should be noted that the QR code must be mandatory to print on the invoice. Failure to print the QR code will result in non-compliance, and the invoice will be considered invalid. In other words, it is deemed to have not been invoiced, and therefore will be subject to the following penalties in each case:
However, CBIC has waived the penalty for non-compliance with dynamic QR codes for B2C invoices generated before March 31, 2021. Enterprises should compulsorily comply with the dynamic QR code regulations from April 1, 2021 to avoid such penalties.
The QR code contains the encoded information about the electronic invoice. It is a two-dimensional version of the barcode and can be scanned from any mobile device. The dynamic QR code is editable and allows additional features such as password protection, scan analysis, device-based redirection, and access management. In addition, it provides a low-density two-dimensional code image that can be scanned reliably.
The National Information Center (NIC) issued a note to clarify all inquiries received via QR codes. The instructions clarify that the QR code of B2B invoices will be generated by the IRP when generating the IRN. However, taxpayers must use their own QR code generation machines and algorithms to generate dynamic QR codes for B2C invoices.
NIC clarified that there is no need to generate an IRN for B2C invoices. If you send a B2C invoice to an IRP, it will automatically reject the same invoice. If you send it multiple times, you can prevent the taxpayer’s IRN from being generated.
The purpose of the B2B invoice QR code is to embed the key details of the reported invoice to verify whether the invoice is actually reported to the IRP and whether the digital signature is complete. In contrast, the main purpose of generating dynamic QR codes for B2C electronic invoices is to control B2C transactions and facilitate the digitization of payments using any UPI.
For all business inquiries about entrepreneurs in the Asia Pacific region, please contact sales@entrepreneurapj.com
For all editorial inquiries for entrepreneurs in the Asia Pacific region, please contact editor@entrepreneurapj.com
For all contributor inquiries related to Entrepreneur Asia Pacific, please contact contributor@entrepreneurapj.com
Post time: Jun-01-2021