Penalty Waiver For Non Compliance Of Qr Code

Recently, to ease up the implementation process of

QR (i.e. Quick Response) Code under Goods and Services Tax, the Central Board of Indirect Taxes and Customs came up with penalty waiver for non-compliance till the period 31st March 2021. The present article covers the background of the introduction of QR code provisions under GST, the general penalty imposable for non-compliance of QR code and temporary penalty waiver announced in the matter.

QR Code provisions under Goods and Services Tax

Firstly, vide notification no. 31/2019- Central Tax dated 28

th June 2019, proviso containing provisions of QR Code was inserted in rule 46 to Central Goods and Services Tax Rules, 2017. Further, vide notification no. 72/2019- Central Tax dated 13th December 2019, the class of registered person required to comply with provisions of QR codes were notified. Accordingly, any registered person (having an aggregate turnover exceeding INR 500 Crores) issuing the invoice to an unregistered person shall have QR (i.e. Quick Response) Code. The notification is effective from 1st April 2020. Later on, the above notification was superseded vide notification no. 14/2020- Central Tax dated 21st March 2020. According to the notification, QR code provisions are applicable to the registered person, having aggregate turnover exceeding INR 500 Crores but other than persons referred to in rule 54(2), 54(3), 54(4) and 54(4A), issuing the invoice to an unregistered person shall have Dynamic QR Code. The notification is effective from 1st October 2020.

Penalty payable for non-compliance with the provisions of QR Code

Section 125 of the Central Goods and Services Tax Act, 2017 covers general penalty provisions. Accordingly, the person/ taxable person contravening the provisions of Act/ rules, the penalty for which is not specifically covered, shall be liable to pay penalty amount which may extend to INR 25,000. Notably, the penalty for non-compliance with the provisions of QR code is not specifically covered under the Act and hence as per section 125, the defaulter can be made liable to a maximum penalty of INR 25,000.

Temporary Penalty Waiver For Non Compliance Of Qr Code provisions

Vide notification no. 89/2020- Central Tax dated 29

th November 2020, the Central Board of Indirect Taxes and Customs has announced conditional waiver of penalty. The said penalty waiver is for non-compliance of the QR Code provisions (as per notification no. 14/2020- Central Tax dated 21st March 2020). The penalty waiver is available only during the period 1st December 2020 to 31st March 2021. Notably, the waiver is available subject to fulfilment of the following condition- The defaulter, availing the benefit of penalty waiver, is mandatorily required to comply with the provisions of QR code, as stated above, from 1st April 2021. Meaning thereby that in case the defaulter fails to comply with the provisions from 1st April 2021, penalty waiver will not be available and accordingly, the defaulter will be liable to pay the penalty even during the period 1st December 2020 to 31st March 2021.

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Frequently Asked Questions

Common questions about QR Code Compliance Penalty Waiver under GST 2021.

A QR (Quick Response) code is a type of barcode that stores information digitally. Under GST rules, certain registered businesses with an annual turnover exceeding 500 crores must include a QR code on invoices issued to unregistered persons.

The QR code provision aims to ease the implementation process of Goods and Services Tax (GST) and improve compliance. It helps in digitizing invoice details and enables seamless sharing of information.

As per the GST notifications, the QR code provision initially came into effect from April 1, 2020. However, it was later deferred to October 1, 2020 for certain registered businesses meeting the specified criteria.

As per Section 125 of the CGST Act, the maximum penalty for non-compliance with the QR code provisions, for which no specific penalty is prescribed, can extend up to Rs. 25,000.

Yes, the Central Board of Indirect Taxes and Customs (CBIC) has announced a conditional waiver of the penalty for non-compliance with QR code provisions from December 1, 2020 to March 31, 2021.

To avail the penalty waiver, the defaulter must mandatorily comply with the QR code provisions from April 1, 2021. Failure to do so will result in the penalty being applicable even for the waiver period.

Registered businesses with an annual aggregate turnover exceeding Rs. 500 crores, other than those covered under specific GST rules (54(2), 54(3), 54(4), and 54(4A)), are required to comply with the QR code provisions when issuing invoices to unregistered persons.

The QR code on GST invoices typically contains information such as the GSTIN of the supplier, invoice number, date, total invoice value, and other relevant details as specified under GST rules.

Businesses can comply with the QR code provisions by updating their accounting/billing software or ERP systems to generate invoices with QR codes as per the GST requirements. Proper staff training and regular monitoring are also crucial.

The use of QR codes on GST invoices offers benefits such as faster data entry, reduced manual errors, improved transparency, and easier tracking of invoices for both businesses and tax authorities.