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2020

“Bill to Ship To” model and E-Way Bill Generation under GST

Bill to Ship To model and E Way Bill Generation under GST

A normal practice in the industry prevails where goods are sold to one person but delivered to a different location. This delivery address is different from the registered office address of the buyer.

This difference in ‘Bill To’ and ‘Ship To’ addresses must be dealt with carefully while issuing an invoice and generating Eway bill.

Bill to Ship to Model:

Under “Bill To Ship To” model of supply, there are three persons involved in a transaction. For example, suppose Mr. A has ordered Mr. B to send goods directly to Mr. C. Here, the parties involved in the transaction are:

  • The Supplier: ‘B’ is the person who is sending goods directly to ‘C’ on behalf of ‘A’;
  • The Recipient: ‘C’ is the recipient of goods;
  • The Third Party: ‘A’ is the person who has ordered ‘B’ to send goods directly to ‘C’.

Third party is the person who actually gives instructions for supply of goods. Here, A is the third person on whose direction good are supplied by supplier B to recipient C.

Invoicing:

In such transactions two supplies are involved; so two tax invoices are required to be issued:

  • Tax Invoice issued by ‘B’ to ‘A’;
  • Tax Invoice issued by ‘A’ to ‘C’

A instructs B to supply goods to C

As per section 10(1)(b) of IGST Act:

“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”

Inter-State Supply:

  • In case of such sale, if supplier and third party are in different States, the supply will be inter-state even if goods are delivered in the same State to final customer on direction of third party.
  • The supplier will charge IGST to third party (the person who actually give the instruction for supply) even if physically goods do not go out of State.

Intra-State Supply:

  • If supplier and third party are in same State, the supply will be intra-state even if goods are delivered to final customer in different State on direction of third party.
  • The supplier will charge CGST and SGST to third party (the person who actually give the instruction for supply) even if physically goods are going out of the State.

E-Way Bill:

  • Preparation of E way Bill for Bill to Ship to model was a big challenge for the trade & industry.
  • There was practical difficulty in preparation of two e-way bill in order to cover entire transaction in this type of e way bill Model.
  • The issue has been clarified in CBIC press release dated 23-4-2018 and this clarification is great relief for trade & industry.
  • It is clarified that only one e-way bill needs to be prepared for Bill To Ship To model of supplies instead of two e-way bills.
  • As per the CGST Rules, 2017 either “A” or “B” can generate the e-Way Bill.

E-Way Bill is generated by “B”:

Where e-Way Bill is generated by “B”, following fields shall be filled in Part A of GST FORM EWB-01:

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

E-Way Bill is generated by “A”:

Bill Form In this field details of “A” are supposed to be filled.
Dispatch From This is the place from where goods are actually dispatched. It may be the principal or additional place of business of “B”.
Bill To In this field details of “C” are supposed to be filled.
Ship To In this field address of “C” is supposed to be filled.
Invoice Details Details of Invoice-2 are supposed to be filled.

Bill From – Dispatched From:

  • There may be another situation arises where invoices is prepared at one place while goods are dispatched from other place i.e. godown or place of job worker.
  • In that situation, part A of e-way bill has two portions under ‘FROM’ section in left side.
  • In ‘Bill From’, supplier’s GSTN and name is entered and in right side, details of the godown / job worker’s place where actually goods are being dispatched, need to be entered. The right side column in From Section is captioned as ‘Dispatched From’ In this case, tax is charged on basis of Bill from State even if goods are actually dispatched from other State. The other details are entered as per invoice.
 

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