Keeping in line with the ‘Digital India’ vision, the government has been pushing for a variety of digitisation and automation reforms in the payments industry, the latest one being the introduction of GST compliant dynamic QR codes for B2C e-invoices.
The Central Board of Indirect Taxes and Customs (CBIC), Ministry of Finance, issued a notification a few months ago, stating that all B2C invoices issued by the taxpayers with an aggregate turnover of more than INR 500 crores should compulsorily carry a GST compliant dynamic QR code.
Taking this thought further, it is imperative to understand the said notification in detail, what it means for your business, and the solution available to overcome the challenge.
In this blog, we will cover:
- What is a dynamic QR code?
- What is the latest government mandate on the use of dynamic QR codes for businesses?
- What is required to make a dynamic QR code GST compliant?
- Which businesses are required to generate GST compliant dynamic QR codes?
- How Razorpay’s GST compliant dynamic QR code is solving the problem?
- How can you generate GST compliant QR code with Razorpay APIs?
What is a dynamic QR code?
A QR code is a quick response code, which contains coded information about an e-invoice. A dynamic QR code is unique to each invoice generated and expires once the payment is made, unlike a static QR code capable of accepting multiple payments and does not have a fixed amount assigned.
The main aim of generating dynamic QR codes for B2C e-invoices is to encourage digital payments using any UPI. It should be noted that a B2C QR code needs to be generated by the taxpayers themselves.
You can instantly validate a GSTIN number using our free Razorpay Number Search & Verification Tool, which helps you verify the authenticity of a GST number online.
What is the latest government mandate on the use of dynamic QR codes for businesses?
B2C transactions are the supplies made to an unregistered person or consumers, and the invoices where the end-user will not be claiming input tax credit are referred to as B2C invoices. Currently, B2C invoices are exempt from e-invoicing.
The latest CBIC notification CBEC-20/16/38/2020-GST directs all taxpayers with an annual turnover of more than INR500 crores in any preceding financial year (starting 2017-18) to compulsorily generate a dynamic QR code to enable digital payments on all B2C invoices. Any failure to comply from October 1, 2021, onwards may attract a penalty of Rs.25,000 leviable for incorrect invoicing under Section 125 of the CGST Act.
What is required to make a dynamic QR code GST compliant?
In terms of Notification No. 14/2020-Central Tax, dated 21st March 2020, the following information is required to be coded on the dynamic QR code to make it GST compliant:
- Supplier GSTIN number
- Supplier UPI ID
- Payee’s Bank A/C number and IFSC
- Invoice number & invoice date,
- Total Invoice Value and
- GST amount along with breakup, i.e. CGST, SGST, IGST, CESS, etc.
It should be noted that the dynamic QR code should be such that it can be scanned to make a digital payment.
You can also calculate the GST amount to be paid along with the breakup of CGST, SGST and IGST with Razorpay’s Free GST Calculator tool.
Which businesses are required to generate GST compliant dynamic QR codes?
As explained above, the notification will be applicable to your business if you (registered person) issue a tax invoice to an unregistered person (B2C invoice), and your annual aggregate turnover exceeds INR500 crores in any of the financial years from 2017-18 onwards.
However, the said notification is not applicable to an invoice issued in the following cases:
- an insurer or a banking company or a financial institution, including a non-banking financial company
- a goods transport agency supplying services in relation to transportation of goods by road in a goods carriage
- supplying passenger transportation service
- supplying services by way of admission to exhibition of cinematograph in films in multiplex screens
How is Razorpay GST compliant dynamic QR code solving the problem?
Since the dynamic QR code is to be generated by the taxpayers themselves, this can seem like a heavyweight task. What if we tell you that we, at Razorpay, have developed a simplified solution for this problem?
Yes, you heard it right! Razorpay QR codes let you generate GST compliant dynamic QR codes for your B2C e-invoicing process. These dynamic QR codes can be easily generated via API at the moment, and can be generated via Razorpay dashboard soon. Razorpay QR codes come loaded with a host of features like:
- Clean and defined APIs with multiple parameters for tracking and reconciliation
- Option to set expiry dates and close QR codes post usage
- Generate QR codes specific to each customer, track payments and usage
- Reconcile payments in real-time for all QR based payments using dashboard reports
- Get a branded UPI QR code with company name, logo and custom merchant VPA (virtual payment address)
- Real-time notifications and webhooks for tracking payments
- Interoperable QR codes – Payments can be made from any UPI Apps (like PhonePe, Google Pay, BHIM, Paytm and others)
How can you generate GST compliant QR code with Razorpay APIs?
To generate a GST compliant QR code follow these steps:
- Log in to your Razorpay Account
- In the left sidebar menu, navigate to Settings → API Keys → Generate Keys
- After generating the keys from the Dashboard, download and save them securely. If you do not remember your API Keys, you need to re-generate it from the Dashboard and replace it wherever required. Do not share your API Key secret with anyone or on any public platforms.
- Use these keys to start using Razorpay APIs and generate dynamic QR codes for use in your B2C invoices.
- You can track payments received on these dynamic QR codes using the Razorpay dashboard for easy reconciliation.
You can read about the detailed step-by-step process here.
We at Razorpay continuously strive to build products that can help you focus on your business growth while we focus on solving your business challenges!