Bill To Ship To under GST and Eway Bill

In this article we have done detailed analysis of Bill To Ship To Concept under GST Act and Eway bill Rules

Bill To Ship To Meaning

It is a normal practice in the industry where goods are sold to one person but delivered to a different location/person .Thus delivery address is different from the registered office address of the buyer.This difference in Bill To Ship To addresses must be dealt with carefully while issuing an invoice and generating Eway bill under GST

For example :-

M/s. A Ltd, a dealer in goods, located in Punjab receives an order from M/s. B Ltd , located in Haryana . The order is for the supply of 1,000 qty of goods, with an instruction to ship this goods to M/s. C Ltd (Customer of M/s.A Ltd), located in Delhi.

There are two transactions involved in this Bill to Ship to example:-

Transaction-1

Between A Ltd. and B Ltd. :

A Ltd. is the supplier and B Ltd. is the buyer. Accordingly, A Ltd. will bill the transaction to A Ltd., and as per the instruction, ships the goods to C Ltd. in Delhi .

Transaction-2

Between B Ltd. and C Ltd. :

B Ltd. is the supplier and C Ltd. is the buyer. B Ltd. bills the transaction to C Ltd.,

Bill To Ship To transactions in GST Act

Place of supply for Bill To Ship To transactions is defined under IGST under Section 10 (b) of IGST Act 2017;

10. (1) The place of supply of goods, other than supply of goods imported into, or exported from India, shall be as under,—

……

(b) where the goods are delivered by the supplier to a recipient or any other person on the direction of a third person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to the goods or otherwise, it shall be deemed that the said third person has received the goods and the place of supply of such goods shall be the principal place of business of such person;

Various examples on how to charge GST in case of Bill To and Ship To transactions :-

Supplier	Bill to (Third Party)	Ship to (Recipient)	Place of Supply	What is to be charged
Punjab	Punjab	Punjab	Punjab	CGST and SGST
Punjab	Haryana	Punjab	Haryana	IGST
Punjab	Punjab	Delhi	Punjab	CGST and SGST
Punjab	Delhi	Delhi	Delhi	IGST
Punjab	Haryana	Delhi	Haryana	IGST

How to issue E way bill for Bill To Ship To transactions

Govt ha clarified by press release on 23 APR 2018 how Eway bill is to be made in case of Bill to Ship to transactions.

In a typical “Bill To Ship To” model of supply, there are three persons involved in a transaction, namely:

‘A’ is the person who has ordered ‘B’ to send goods directly to ‘C’.
‘B’ is the person who is sending goods directly to ‘C’ on behalf of ‘A’.
‘C’ is the recipient of goods.

Bill to Ship to under GST and Eway Bill

In this complete scenario two supplies are involved and accordingly two tax invoices are required to be issued:

Invoice -1, which would be issued by ‘B’ to ‘A’.
Invoice -2 which would be issued by ‘A’ to ‘C’.

Queries have been raised as to who would generate the e-Way Bill for the movement of goods which is taking place from ‘B’ to ‘C’ on behalf of ‘A’. It is clarified that as per the CGST Rules, 2017 either ‘A’ or ‘B’ can generate the e-Way Bill but it may be noted that only one e-Way Bill is required to be generated as per the following procedure:

Case -1: Where e-Way Bill is generated by ‘B’, the following fields shall be filled in Part A of GST FORM EWB-01:

1.	Bill From:	In this field details of ‘B’ are supposed to be filled.
2.	Dispatch From:	This is the place from where goods are actually dispatched. It may be the principal or additional place of business of ‘B’.
3.	Bill To:	In this field details of ‘A’ are supposed to be filled.
4.	Ship to:	In this field address of ‘C’ is supposed to be filled.
5.	Invoice Details:	Details of Invoice-1 are supposed to be filled

Case -2: Where e-Way Bill is generated by ‘A’, the following fields shall be filled in Part A of GST FORM EWB-01:

1.	Bill From:	In this field details of ‘A’ are supposed to be filled.
2.	Dispatch From:	This is the place from where goods are actually dispatched. It may be the principal or additional place of business of ‘B’.
3.	Bill To:	In this field details of ‘C’ are supposed to be filled.
4.	Ship to:	In this field address of ‘C’ is supposed to be filled.
5.	Invoice Details:	Details of Invoice-2 are supposed to be filled.

[Refer Bill To Ship To issues of Eway Bill Clarified by Govt ]

Video on Bill To Ship To under Eway Bill

Refer below video on Bill to Ship to transactions and how Eway Bill needs to be made

Bill To Ship To transactions : Important Points

If there is wrong classification of Place of supply in case of Bill To and Ship To between interstate or intra-state and vice-versa , then it may leads to wrong payment of GST by Taxpayers.
If wrong GST is paid on the basis of wrong classification of Place of Supply in Bill To and Ship To then refund will have to be claimed of the wrong tax paid by the taxpayer and correct GST has to be paid.

Various Examples of Bill To Ship To transactions after GST

Under all the below stated cases , the Bill to Ship to address as in the GST Tax invoice shall be different because customer buying the goods has his billing address at his registered office address whereas the goods are shipped to a different address by the supplier on the direction of buyer. This address is required while generating the Eway Bill for transfer of goods.

Buyer may direct to supplier to deliver at one of his warehouses which is at a location other than his registered office.
Buyer (in case of trading business) may direct to supplier to deliver goods directly to one of his customer’s locations (third party).
Buyer may direct to supplier to deliver goods to a specially designed storage facility (cold storage, customs warehouse, etc.)
Buyer may direct to supplier to deliver goods to an institutional customer to whom he has already sold the goods further who is at a different location.
If Buyer’s customer is a retail chain and may direct to supplier to deliver goods to various outlets.

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Goods and Service Tax in India

Sunday, August 26, 2018