Government Waives Non-Compliance Penalty For QR Code Provisions For B2C Transactions Till March 2021
A QR Code scanning app on a phone. (Source: Freepik)

Government Waives Non-Compliance Penalty For QR Code Provisions For B2C Transactions Till March 2021


The government has given a conditional waiver on the penalty for non-compliance with QR code provisions for business-to-consumer invoices generated by businesses for four months till March 31, 2021.

Business with a turnover exceeding Rs 500 crore would have to mandatorily issue B2C invoices with dynamic QR code from April 1, 2021 to avail this penalty waiver.

The requirement of printing dynamic QR code on B2C invoices is being implemented from Dec. 1. Quick Response code or QR code helps users verify the details in digitally signed e-invoices.

The Central Board of Indirect Taxes and Customs, in a Nov. 29 notification, said the penalty has been waived for non-compliance with QR code provisions for B2C transactions between the period from Dec. 1, 2020 to March 31, 2021, subject to the condition that the said person complies with the provisions from April 1, 2021.

Sources in Department of Revenue said the government has been pursuing the banks, vendors and the National Payments Corporation of India for almost a year now to introduce GST enablement on UPI.

Also read: UPI Ubiquity Will Ease QR Code Standardisation

"Multiple meetings were conducted by the DoR with NPCI, top banks and other stakeholders to push the project," the sources said.

NPCI developed the necessary solution required and shared technical documents, FAQs (frequently asked questions), among others, with the banks. The NPCI was ready for bank certification from Feb. 6, 2020 and targeted for GST enablement on UPI to go-live from first week of March 2020, they added.

However, majority of the banks lagged behind in their preparedness for enablement of GST on UPI despite multiple meetings, persuasions and necessary support from NPCI, the sources said.

At a high level review meeting on GST enablement on UPI, it was decided to give one-time waiver on penalty provisions for four months period till March 31, 2021, on the condition that the stakeholders would set up necessary process during this period to go-live with QR code on invoices by April 1, 2021, thereby enabling GST on UPI.

Accordingly, the government, said the sources, decided to waive the penalty for issuing invoices without dynamic QR code from Dec. 1-March 31, 2021, provided that the taxpayers start complying with requirement of QR code from April 1, 2021.

Also read: RBI’s New QR Code Rules Set To Alter India’s Payments Landscape

Commenting on the step, EY Tax Partner Abhishek Jain said, "The central government has provided the much required relaxation for the businesses by waiving the penalty for non-compliance with QR code requirement till March 2021 for B2C transactions.

"As many of the industry players were not ready, this waiver would give the requisite time for the industry to be ready for this compliance."

AMRG & Associates Partner Rajat Mohan said, "Government has waived the penalty for non compliance to QR code provisions if they are complied by April 1, 2021, for default during the period of Dec. 1, 2020 to March 31, 2021. This will be a relief for large taxpayers who were unable to implement this digital change in invoicing system due to the shortage of resources during the pandemic."

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