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  E-Invoicing and QR Code for B2C Invoices under GST

  December 1, 2020

  What is e-invoice? An electronic invoice (e-invoice) contains data from the supplier in a structured format that the buyer’s financial system can automatically...

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E-Invoicing and QR Code for B2C Invoices under GST
What is e-invoice?
An electronic invoice (e-invoice) contains data from the supplier in a structured format that the buyer’s financial system can automatically recognize, without requiring manual data input from the administrator. A digital invoice is an invoice that can be viewed and processed digitally.
Under Goods and Services Tax (GST), companies with a turnover of over Rs 500 crore will have to generate e-invoice for B2B (business-to-business) transactions from October 1.
QR Code for b2c invoices:
As per Notification No.14/2020- Central Tax, given on March 21st, 2020, e-Invoicing does not apply to B2C invoices, however, it mandates taxpayers to generate dynamic QR Codes for their B2C invoices, mandatory.
If you are a business & have an annual aggregate turnover of over Rs. 500 Crores then you are required to generate QR Codes for the invoices made for unregistered recipients.
what is QR code?
A QR code is a quick response code. It contains coded information about an e-invoice. It is a two-dimensional version of a bar code and can be scanned from any mobile device. B2C QR code has to be self-generated by the taxpayer. For B2C invoices, IRN generation is not required. If a B2C invoice is sent to IRP, it will be automatically rejected, and if sent multiple times, then the IRN generation for that taxpayer can be blocked. Thus, the main motto of generating QR codes for B2C e-invoices is to promote digitization of payments using any UPI.
Dynamic QR code – A dynamic QR code is editable and allows additional features such as scan analytics, password protection, device-based redirection and access management. It provides a less dense QR code image, which is more reliable to scan.
How to generate the QR code for B2C invoices? what are the Specifications for B2C QR Code?
The Government has not specified any particular detail or method to generate B2C QR Codes, so taxpayers can generate their own QR Codes using their QR code generating machines & algorithms.
A regular B2B QR code must contain the following details:
• • GSTIN of the supplier
  • GSTIN of the recipient
  • Invoice number, given by the supplier
  • Date of the generation of invoice
  • Invoice value
  • The number of line items
  • HSN Code of the main item
  • Unique Invoice Reference Number/Hash
QR Code must display the details above mentioned when it’s scanned.
Same details are required for B2C QR codes as well, except:
• GSTIN of the recipient – As the recipient is an unregistered person, instead of mentioning his GSTIN, a taxpayer can mention his name.
• A taxpayer must include a payment reference link so that the recipient is redirected to the payment reference link.
Implementation of QR code on B2C invoices will enable the government to get hold over B2C transactions. Also, it promotes the digitization of payments. One can make payments using UPI in a single go. One need not enter the amount, enter the UPI PIN/password and the payment will be made as per the amount mentioned on the e-invoice.
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• 

  CBDT has given clarifications on set off of brought forward loss due to additional depreciation & MAT credit if companies opt for 22% tax

  December 5, 2019

  1.1  Domestic Company wants to opt for 22% tax is not eligible to set off of brought forward loss on account of additional...

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CBDT has given clarifications on set off of brought forward loss due to additional depreciation & MAT credit if companies opt for 22% tax
1.1  Domestic Company wants to opt for 22% tax is not eligible to set off of brought forward loss on account of additional depreciation
1. As per the provisions of newly inserted Sec 115BAA, total income of the company (opted for 22% tax) shall be computed without any deduction towards:
   • SEZ u/s 10AA
   • Additional depreciation @20% u/s 32(1)(iia)
   • Investment allowance in respect of new plant and machinery u/s 32AD
   • Accelerated capital deduction u/s 35AD
   • Chapter VI-A – “C – Deductions in respect of certain incomes” i.e. 80IA, 80IB, 80IC etc… However, deduction u/s 80JJAA (in respect of employment of new employees)
   • Tea development benefit u/s 33AB
   • Site restoration benefit u/s 33ABA
   • Scientific research benefit u/s 35
   • Agricultural extension project benefit u/s 35CCC
2. Further, total income shall be computed without set off of any brought forward loss if such loss is related to above mentioned deductions.
3. Based on the above, CBDT clarified that, a domestic company which would exercise option for 22% tax shall not be allowed to set off of any brought forward loss on account of additional depreciation for that assessment year (AY) in which option exercised and for any subsequent AY’s.
4. Further, it is clarified that as there is no time line for opting 22% tax, a domestic company having brought forward losses on account of additional depreciation, can exercise option after set off of losses so accumulated.
1.2. Domestic Company wants to opt for 22% is not eligible to claim brought forward MAT credit
• CBDT clarified that MAT u/s 115JB itself not applicable, if domestic company opt for 22% tax. Accordingly, credit of MAT also not eligible to claim.
• Further, it is clarified that as there is no time line for opting 22% tax, a domestic company having brought forward MAT credit, can exercise option after utilising the accumulated credit.
Our Comments
• Amendment has been made only in Sec 115JB (i.e. MAT is not applicable if domestic companies opt for 22%) by way of Taxation Laws (Amendment) Ordinance, 2019 and no amendment is made u/s 115JAA (i.e. Utilising brought forward MAT credit against normal tax liability).
• In many judicial pronouncements, courts held that CBDT does not have any power to override the provisions of the Act and Rules. Further, CBDT circular is not binding on the assessee.
• Sec 115JAA deals with utilisation of brought forward MAT credit against normal tax liability and no restriction on the same by Taxation Laws (Amendment) Ordinance, 2019, in case company opt for 22% tax. Hence, companies are eligible to utilise accumulated MAT credit against normal tax liability even if they opt for 22%.
1.3. Effective Tax Rate (ETR) schedule for FY 2019-20 (AY 2020-21)
• SI No	Particulars	ETR if option exercised	If option not exercised & wants to set off of B/F loss of additional depreciation
  			ETR	Effective MAT Rate
  1.	Turnover > Rs.400 Crore during the FY 2017-18		On balance income	On book profit
  	·         Income ≤ Rs.1 crore	25.17%	31.20%	15.6%
  	·         Income > Rs.1 crore ≤ Rs.10 crore	25.17%	33.38%	16.69%
  	·         Income > Rs.10 crore	25.17%	34.94%	17.47%
  2.	Other domestic companies (in existence on or before 30-Sep-2019)
  	·         Income ≤ Rs.1 crore	25.17%	26%	15.6%
  	·         Income > Rs.1 crore ≤ Rs.10 crore	25.17%	27.82%	16.69%
  	·         Income > Rs.10 crore	25.17%	29.12%	17.47%
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