General

Unique Quantity Code (UQC)

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.

Why is Unique Quantity Code important?

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.

What is a unique quantity code?

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.

What is a unique code system under GST?

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.

What are different types of unique quantity codes?

There are five types of UQCs under GST:

  1. UQC Code: 99112400000 – Measuring Scale (for weighing)
  2. UQC Code: 99113000000 – Volume (for liquids and gases)
  3. UQC Code: 99114100000 – Count (for commodities which cannot be weighed or measured by volume, such as cigarettes and gems)
  4. UQC Code: 99119100000 – Number (for items such as tickets, fixed number for a specific event)
  5. UQC Code: 99112600001– Length (for measuring length).

How to calculate the input tax credit using unique quantity code?

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:

  1. Value of supply = Rs 100
  2. Rate of GST= 18%
  3. Input tax credit available on purchase = Rs 9.09 (calculated as 18/113)
  4. ITC that can be claimed by supplier as per above calculation = Rs 9.09

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.

What is the maximum value of an e-way bill based on the type of goods purchased?

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).

Features of Unique Quantity Code (UQC)

  • The Unique Quantity Code (UQC) is a measuring quantity under the GST system for a 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.
  • The Unique Quantity Code is a system of measuring the standard quantity of a commodity or a service for a particular use, as under the GST system it will apply to all taxpayers. There are several types of measuring units that may serve this purpose, but currently, the Unique Quantity Code is a code that will be used under GST. The types of measuring units are:

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.

  • Another key component of the Unique Quantity Code will be its application in real life situations, such as electronic invoicing or e-way bills.
  • The Unique Quantity Code will be used to measure the standard quantity of a commodity or service for a particular use, as it will apply to all taxpayers.
  • Unique Quantity Code (UQC) under GST in India is a standard measuring quantity used by all taxpayers. Today almost every system, whether online or offline, which deals with the movement of goods requires this code for its functioning.
  • UQC has been given to identify specific quantities for specific purposes under the New Goods and Services Tax in India. When a taxpayer supplies or transports goods, he is required to identify the goods with their respective UQCs.
  • The use of the UQC eliminates the possibility of having multiple codes for one type of commodity which was prevalent earlier (10 to 20 such codes existed for each commodity before GST).
  • UQC is a unique identifier for each commodity, it will help in better coordination between state regulators and GST administrators.
  • The government has also been working on the e-way bill system which needs to be filled with goods’ UQCs as well as details of the supplier, recipient, and transporter involved.
  • A unique feature of the UQC is that it eliminates possible, not mandatory but taxpayers are advised to use it. Though GST Network (GSTN) has developed software for its implementation, the government hasn’t made it compulsory yet.

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.