In a B2C (business-to-consumer) transaction under the Goods and Services Tax (GST) regime, it is not mandatory to mention the HSN code in the invoice in case of services, regardless of the value of supply. The HSN code is used to classify goods and is not applicable to services.
In the case of services, the Service Accounting Code (SAC) is used to classify services, and if the value of the supply of services exceeds Rs. 50 lakhs in a financial year, it is mandatory to mention the SAC code in the invoice.
Under the Goods and Services Tax (GST) regime, a supply made without an invoice is considered to be an illegal supply and can attract various penalties.
The specific penalties that may be imposed in the case of a supply made without an invoice in a B2C (business-to-consumer) or a supply made with false and wrong invoices transaction depend on the circumstances of the case and the discretion of the tax authorities. Some common penalties that may be imposed include:
- Fine or penalty for not issuing an invoice
- Interest on the tax amount not paid on time
- Disallowance of input tax credit
- Prosecution and imprisonment in severe cases
As per the GST laws, the fine or penalty can be up to 100% of the tax evaded, and in some cases, it can even be higher. Additionally, interest may be charged on the tax amount not paid on time, and in some cases, the input tax credit may also be disallowed.
It is important for businesses to comply with the GST laws and regulations and to issue invoices for all taxable supplies made. Failure to do so can result in serious consequences, including penalties and legal action.
Note: GST laws and regulations are subject to change, and businesses should keep themselves updated with the latest changes.