Under the supervision of the Ministry of Finance and the Department of Revenue, the Central Board of Indirect Taxes and Customs (CBIC) has released clarification on the applicability of the Dynamic Quick Response (QR) Code on B2C invoices. In an official statement the CBIC has clarified that "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 a 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, the Board, in exercise of its powers conferred under section 168(1) of the CGST Act, 2017, hereby clarifies the issues hereafter.
According to the CBIC, there is some uncertainty as to whether a supplier who receives payments from a recipient outside India using RBI-approved forms of payment but not in foreign exchange will be free from the necessity of a dynamic QR code on invoices. The purpose of the clarification, as stated in Circular No. 156/12/2021 dated June 21, 2021, was not to grant relief in circumstances where payment is received by the provider in any RBI-approved channel other than foreign exchange. To further clarify the situation, the following entry is inserted at S. No. 4 of Circular No. 156/12/2021-GST dated June 21, 2021:
In cases, where the 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?
CBIC says "No. Wherever an invoice is issued to a recipient located outside India, for the 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."