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Clarification in respect of applicability of Dynamic Quick Response (QR) Code on B2C invoices and compliance of notification 14/2020- Central Tax dated 21st March, 2020

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Various references have been received from trade and industry seeking further clarification on applicability of Dynamic Quick Response (QR) Code on B2C (Registered person  to Customer) invoices for compliance of notification 14/2020-Central Tax, dated 21st March,  2020 as amended.

It has been represented that in some cases where, though the service recipient  is located outside India and place of supply of the service is in India as per IGST Act 2017, the  payment is received by the service provider located in India not in foreign exchange, but through  other modes approved by RBI. In such cases, the supplier will not be fulfilling the condition  specified in S. No. 4 of the Circular No. 156/12/2021 dated 21st June 2021, and accordingly, will  be required to have dynamic QR code on the invoice.

It has been also represented that relaxation  from dynamic QR code on the invoices in such cases should be available if the payment is  received through any RBI approved mode of payment, and not necessarily in foreign exchange.

The issues have been examined and in order to ensure uniformity in the implementation of the provisions of the law across the field formations hereby clarification is issued.

It is observed that from the present wording of S. No. 4 of Circular No. 156/12/2021 dated 21stJune 2021, doubt arises whether the relaxation from the requirement of dynamic QR code on the invoices would be available to such supplier, who receives payments from the recipient located outside India through RBI approved modes of payment, but not in foreign exchange. It is mentioned that the intention of clarification as per S. No. 4 in the said circular was not to deny relaxation in those cases, where the payment is received by the supplier as per any RBI approved mode, other than foreign exchange.

Accordingly, to clarify the matter further, the Entry at S. No. 4 of the Circular No. 156/12/2021-GST dated 21st June, 2021 is substituted as below:

” In cases, where receiver of services is  located outside India, and payment is being  received by the supplier of services ,through RBI approved modes of payment, but as per provisions of the IGST Act 2017, the place of supply of such services is in India, then such supply of services is not considered as export of services as per the IGST Act 2017;  whether in such cases, the Dynamic QR  Code is required on the invoice issued, for  such supply of services, to such recipient  located outside India? No. Wherever an invoice is issued to a recipient located outside India, for supply of services, for which the place of supply is in India, as per the provisions of IGST Act 2017, and the payment is received by the supplier, in convertible foreign exchange or in Indian Rupees wherever permitted by the RBI, such invoice may be issued without having a Dynamic QR Code, as such  dynamic QR code cannot be used by the recipient located outside India for making payment to the supplier.”

Circular No. 156/12/2021-GST, dated 21.06.2021 stands modified to this extent.

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