According to a notification issued Sunday, the Board said that the waiver will be applicable subject to the condition that compliance will be necessarily undertaken from April 1, 2021.
"The 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 the 01st day of December, 2020 to the 31st day of March, 2021, subject to the condition that the said person complies with the provisions of the said notification from the 01st day of April, 2021," the notification said.
Experts said the extension was much-warranted and in response to demands made by industry to the government.
"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," said Pratik Jain, tax partner at PwC India.
Jain added that government should come up with more details soon and industry would need to start preparing for this change.
Industry had sought for a three month delay in implementation of dynamic quick response (QR) code on electronic invoices from business to consumer transactions, citing lack of clarity in law and inadequate preparedness at the ground level on its own end.
Issues of systems integration of banks on both buyer and supplier ends have also cropped up, said industry executives aware of the development, adding voices to demand for more time.
"The systems are designed to accept static QR codes and now they have to change to dynamic QR codes. So the infrastructure needs to be synchronised with the change," a senior executive from electronic payments industry said, asking not to be named.
Industry has sought whether it can refer to NPCI's norms of generating the QR codes.
On clarity of law, industry has asked that government should clarify the contents that the QR code should carry, and what will comprise compliance with GST law or any other law.
Industry had sought clarify that dynamic QR code should not be needed in case of transactions with the customer is located outside India, as it has not clarified meaning of 'unregistered persons' to which e-invoices cannot be issued, as mentioned in rules.
"Export invoices entail requirement of Invoice Reference Number (IRN) from NIC which is QR code returned from NIC, thus no need arises for another QR code," an executive said.
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.
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