A Unique Quantity Code (UQC) is a measuring quantity under the GST system for standard use by all taxpayers. Its application is found not only on the GST portal but also in e-way bills and e-Invoicing systems.
UQCs are used to measure quantities of goods such as 500 grams, 1 liter, etc. The use of UQC avoids the need for any other measure to be used by the suppliers and clients in their business transactions, reducing transaction costs and errors. UQCs help taxpayers to get an idea about how much input tax credit they can claim on GST paid on purchases against output tax liability incurred. They also help suppliers to understand the maximum value of an e-way bill based on the type of goods purchased.
The State Finance Ministers – Goods and Services Tax (GST) Committee has decided to use Unique Quantity Code under the GST system. This code is a measuring quantity for a standard use that will be used by all taxpayers, not only on the goods and services portal but also in e-way bills and e-Invoicing systems. The Unique Quantity Code will be found in four-digit format and can contain up to three decimal places.
Contents
UQCs are used as a standard measure for calculating tax payable under GST, which helps in minimizing compliance costs to businesses by avoiding the need for them to keep records of various measures or having to reconcile different measures while doing their business transactions. Rule 46 of CGST Act,2017 lays down the components that should form part of tax invoice, credit, and debit notes. One of the components of tax invoices is the quantity where goods are supplied to the end-user. The supplier along with the quantity is also required to mention the unit of measurement of goods. For example 1 kg rice, 100-meter cloth. Therefore, it is mandatory for the supplier to mention the measurement unit which is known as a unit or Unique Quantity Code (UQC) for generating GST invoices.
A unique quantity code (UQC) is a measuring standard for selected goods and services under the GST system in India. It helps taxpayers to get an idea about how much input tax credit they can claim on GST paid on purchases against output tax liability incurred. Also, the suppliers can understand the maximum value of an e-way bill based on the type of goods purchased.
Under the GST regime, there has been a major change in measuring quantity as compared to previous indirect taxation systems. The earlier method of measurement was not uniform and lacked a standard unit to measure goods. UQC has replaced the earlier system as it does not require any other measure to be used by either the supplier or client in their business transactions, thus reducing transaction costs and errors.
There are five types of UQCs under GST:
Input tax credit can be claimed on GST paid on purchases against output tax liability incurred. In the GST process, the supplier calculates his final tax payable by multiplying the value of taxable supply with applicable GST rate and then claims input tax credit on the purchased goods from the dealer from where he purchased it on which GST has been already paid.
Illustration
In order to understand how to calculate ITC under GST, let us take an example where a supplier has made transactions as follows:
From the above example, it is evident that if GST has been paid on purchase of goods, input tax credit can be claimed by the supplier as long as the value of taxable supply (i.e. sales) does not exceed Rs 100 and total turnover does not exceed Rs 20 lakhs in a financial year.
An e-way bill is issued when goods are being transported for sale beyond 10 km from their origin. A supplier can issue an e-way bill by entering the unique quantity code of the goods in question while filing his e-way bill. The value of e-way bill shall be the UQC code in which goods are classified under GST.
This limits the total taxable turnover for any supplier when he issues an e-way bill when moving goods for his client. The maximum limit of an e-way bills is Rs 50,000/- (Rs 10,000/- in case of special category states) for anyone invoice against the same UQC code. This means that an e-way bill can be generated only when the total value of taxable supply is equal to or less than Rs 50,000/- (Rs 10,000/- in the case of special category states).
The first two parts are used as a unit of measure and sufficient for making calculations on an invoice or bill of entry under the GST. The four-digit format is divided into three parts by the decimal point. The first part consists of numbers from 0-9 and can he first part consists of numbers from 0-9 and can contain from one to nine numbers. The second part contains the number from 0-4 and can contain from one to four numbers. Finally, the third part is made up of three numbers assigned by GSTN which stand for an authority that has been assigned a total value of 0-9.
Examples of GST UQC code list
UQC Quantity Description
BAG BAGS
BDL Bundles
BKL Buckles
BTL Bottles
BUN Bunches
CBM Cubic Meter
GMS Grams
KGS Kilograms
MTR Meters
NOS Numbers
If in any case the UQC is not mentioned then UQC ‘OTH’ which means ‘Others’ can be used as the description of the quantity. GST network portal only accepts the correct UQC for products. If in any case different UQC is used in that case it will generate an error at the time of ITR Filing.