As is well known, electronic invoices (e-Invoices) have been made mandatory by the Government of India with effect from 01 Oct 2020 for all B2B transactions by business entities with a turnover greater than Rs 100 Crore.
What this means is that all invoices, generated by companies using their existing ERP/ Accounting System will need to be converted into a specified “electronic” format (JSON), and this submitted to the government’s Invoice Registration Portal (IRP). The IRP will return this to the originator duly “signed”, and with a “QR Code” added to the Invoice. A sample QR Code is as under:-
The above QR Code can be scanned to extract information as under:-
- GSTIN of the supplier
- GSTIN of the recipient
- Invoice number given by the supplier
- Date of the generation of invoice
- Invoice value
- Number of line items
- HSN Code of the main item
- Unique Invoice Reference Number/Hash
The signed e-Invoice in JSON format can be converted to human readable pdf format that can be printed, downloaded or sent as email to the buyer. The layout of the Invoice so generated in PDF/ Print format can be customized by companies with their logo, terms & conditions etc, the only stipulation being that this must contain the QR Code provided by the IRP.
This stipulation is because the QR Code (displayed on print/ pdf Invoices) can be scanned by any agency to validate that the Invoice has indeed been registered and signed by the IRP. Till Mar 2020, the stipulation to display QR Code on Invoices was applicable only for B2B Invoices.
B2C (or Business to Customer) Invoices are those where the buyer is the end user who will not be claiming Input Tax Credit (ITC) from GSTN. As per the Notification published after the 39th GST Council meeting held on 14th March 2020, the government has made it mandatory for businesses with turnover greater than 500 Crore to display QR Code on their B2C Invoices too.
However there is an ambiguity in the following explanation indicated in the above Notification:-
“Provided that where such registered person makes a Dynamic Quick Response (QR) code available to the recipient through a digital display, such B2C invoice issued by such registered person containing cross-reference of the payment using a Dynamic Quick Response (QR) code, shall be deemed to be having Quick Response (QR) code.”
In the above, the “registered person” is the seller who has been assigned a GST Number, while the “recipient” is the buyer who is not registered with GSTN.
Normally, a QR Code printed on a Bill is static, and its content cannot be changed after the Bill is handed over to the customer. However, here the requirement seems to be to provide a “Dynamic QR Code” through a “digital display”.
This would mean that the dynamic QR Code in every printed Bill given to the buyer must contain the link to a URL using which the buyer can navigate to the “digital display” indicating the payment status (“cross-reference”) of the Bill
If this interpretation is correct, then every Company with aggregate turnover over Rs 500 Crore that needs to issue B2C Invoices with effect from 01 Oct 2020 will need to have a cloud based software application which will provide the “digital display” using which their retail customers (or tax officials) can view the payment status of B2C Invoices.
We would need to get further clarification from the GST Council regarding the above interpretation.
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