B2C transactions: CBIC waives penalty on non-compliance to QR code till March 31

Our Bureau New Delhi | Updated on November 30, 2020

The QR code for B2C transactions is meant to encourage digital payments by the buyers and used to check tax leakages

The Central Board of Indirect Taxes and Customs (CBIC) has waived penalty on non-implementation of dynamic Quick Response (QR) code by certain companies till March 31, 2021.

It may be recalled that implementation of dynamic QR code was mandatory for B2C transactions in respect of companies with over ₹500 crore turnover with effect from December 1.

This waiver from penalty is subject to the condition that compliance will be undertaken from April 1 next year. Tax experts see the essence of this CBIC move to waive penalty as deferral of the proposal till April 1 next year.

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“Government, on the recommendations of the GST Council, hereby waives the amount of penalty payable by any registered person under section 125 of the said Act for non- compliance of the provisions ..between the period from 1st day of December 2020 to the 31st day of March 2021, subject to the condition that the said person complied with the provisions of the said notification from 1st day of April 2021”, a CBIC notification said.

Pratik Jain, Tax Partner at PwC India, pointed out that QR code for B2C transactions is meant to encourage digital payments by the buyers but can potentially be used to check tax leakages as well. “It would have an impact on all consumer facing businesses including retail, restaurants, hotels and so on. It’s definitely a good idea for the Government to implement this,” he said.

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However, since the exact requirements about the content of QR code has not been outlined as yet, the Government has effectively deferred it till April 1, 2021 by saying that no penalty would be imposed if the businesses start complying from this date, Jain added.

“We expect the Government to come up more details shortly and industry would need to start preparing for this change,” he said.

Abhishek Jain, Tax Partner, EY, 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”.

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Published on November 30, 2020
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