Compliance With ‘Bill to’ And ‘Ship to’ in E-way Bill
Often the address of the buyer of goods is different from the address where the goods need to be delivered. The address of the buyer is mentioned in “Bill to” and the address where goods are to be delivered is mentioned in “Ship to”. Such situations need to be handled carefully while generating e-way bills and issuing invoices. In this article we will show you how to deal with different “bill to” and “ship to” addresses while generating e-way bills.
What is a ‘Bill to – Ship to’ Transaction in GST?
A ‘Bill to – Ship to’ transaction happens when one person is billed for the goods, but the goods are delivered to a different person or a different location. The “Bill To” party pays for the goods and receives the invoice, while the “Ship To” party actually receives the goods.
Usually, three parties are involved:
- The supplier, who sells and dispatches the goods
- The buyer (Bill To), who places the order and gets the invoice
- The final recipient (Ship To), who physically receives the goods
This model is very common in trading, distribution and manufacturing. For example, a distributor may ask the manufacturer to send goods directly to a retailer, even though the invoice is raised on the distributor. GST law recognises these transactions and provides specific rules for place of supply, e way bill and input tax credit so that tax is correctly paid and credit flows smoothly.
Example of Different ‘Bill to’ and ‘Ship to’ Addresses
Let’s look at an example to understand the ‘Bill to’ And ‘Ship to’ model of supply:
- ‘Mr. A’ buys goods from ‘Mr. B’
- Mr. A instructs Mr. B to deliver the goods directly to ‘Mr. C’
Since there are two supplies in this situation, two invoices will need to be raised:
- The first invoice would be issued by Mr. B to Mr. A.
- The second invoice will be issued by Mr. A to Mr. C.
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Place of Supply in ‘Bill to – Ship to’ Transactions
In ‘Bill to – Ship to’ cases, GST treats the buyer who instructs delivery as the person who has received the supply. The place of supply is linked to the location of this buyer, even if the goods are delivered to some other state.
Where goods are delivered by the supplier to a recipient or any other person on the direction of a third person, it is deemed that the third person has received the goods. The place of supply is then the principal place of business of that third person.
Example:
- A in Maharashtra orders goods from B in Gujarat and asks B to send them directly to C in Delhi.
- For the supply from B to A, the place of supply is Maharashtra, so B charges IGST to A.
- A then sells the goods to C. For this second supply, the place of supply is Delhi. Depending on A’s registration, A charges the correct tax (IGST or CGST plus SGST) on this invoice.
By correctly identifying the place of supply for both legs of the transaction, businesses avoid wrong classification between intra state and inter state supplies and reduce future disputes.
Case 1 – ‘Mr. B’ Generates the E-Way Bill
In this case, the following fields must be filled in part A of GST Form EWB-01 :
| Field | Details to be Filled |
|---|---|
| Bill From | In this field details of ‘B’ must be filled |
| Dispatch From | The location from where the goods are dispatched. It can be the principal or an additional place of business of ‘B’ |
| Bill To | In this field, details of ‘A’ must be filled |
| Ship To | In this field, address of ‘C’ must be filled |
| Invoice Details | Details of Invoice-1 must be filled |
Case 2 – ‘Mr. A’ Generates the E-Way Bill
In this case of ‘Bill to’ And ‘Ship to’, the following fields must be filled in part A of GST Form EWB-01:
| Field | Details to be Filled |
|---|---|
| Bill From | In this field details of ‘A’ must be filled |
| Dispatch From | The location from where goods are dispatched. It can be the principal or an additional place of business of ‘B’ |
| Bill To | In this field, details of ‘C’ must be filled |
| Ship To | In this field, address of ‘C’ must be filled |
| Invoice Details | Details of Invoice-2 must be filled |
Situations with Different ‘Bill to’ And ‘Ship to’ Addresses
There are some situations where the transferred products are shipped to a location other than the purchaser’s (registered address). Here are a few unusual scenarios when a customer might request delivery to a different address or a third party:
- The buyer requests delivery to one of the seller’s warehouses, which is not the seller’s registered office.
- Buyer (trading company) requests direct delivery of the products to one of his clients’ locations (third party).
- Buyer requests delivery of the products to a facility for special storage (cold storage, customs warehouse, etc.)
- The buyer needs the items delivered to a customer to whom he has already sold the goods but is located at a separate location.
- The buyer’s client is a retailer that needs goods delivered to multiple shops.
The addresses for the “Bill to” and “Ship to” on the GST invoice must differ in the above situations. As the goods are transported to a different address, the consumer purchasing the goods has his billing address at his registered office address.
While generating the Eway Bill for the transfer of goods, this address is necessary. The person should properly state the buyer’s GSTIN and the delivery location while creating the Eway bill. The delivery location specified must correspond to the location where the goods will be delivered rather than the billing location (in the case where the delivery location differs from the billing address).
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Responsibility to Generate Eway Bill
Let’s take a look at who is responsible for generating e-way bill in different scenarios:
- In case GSTIN of buyer and receiver is the same
There are situations where the’Bill to’ And ‘Ship to’ addresses are different from each other, however the delivery is still made to the same person, as the GSTIN at both locations is the same.
For example, ‘X’ is a large dealer of watches with a registered office in Pune. He also has multiple warehouses spread throughout Maharashtra. He buys 1,000 watches from his supplier ‘Y’ who is based in Mumbai. However, X instructs Y to send the watches directly to X’s warehouse in Kolhapur. In such a scenario, the “Bill to” and “Ship to” addresses are different, hence the GST invoice will clearly mention the two different addresses. The registered office address will appear in “Bill to” and the address of the warehouse where the goods are to be delivered will appear in “Ship to”. The transporter of the goods will need to carry the E-Way Bill during transportation. - In case the GSTIN of buyer and receiver are different
In this case, delivery is made to a different person, i.e., with a different GSTIN, and the ‘Bill to’ And ‘Ship to’ addresses are different. This may occur, for instance, when products are delivered straight from the supplier to the buyer’s client (a third party).
Continuing with the example of X and Y, if X asks Y to deliver the products straight to ‘Z’, who is a wholesale customer of X, then the GSTIN of the buyer will be different from that of the receiver. However, there is no change in the requirements for an e-way bill. In this scenario too, only one e-way bill is required, which can be generated by either Y or Z. X has no role to play in the generation of the e-way bill, for he is not the supplier, the receiver or the transporter.
Input Tax Credit in ‘Bill to – Ship to’ Transactions
In a ‘Bill to – Ship to’ model, there are generally two taxable supplies and two invoices:
- Invoice from the supplier to the buyer (Bill To party)
- Invoice from the buyer to the final recipient (Ship To party)
Input tax credit (ITC) flows as follows:
- The buyer (Bill To party) can claim ITC of the tax charged by the supplier on Invoice 1, even though the goods were delivered directly to the final recipient. The conditions are that the buyer pays for the supply, is in possession of a valid tax invoice and the goods are deemed to be received on their behalf.
- The final recipient (Ship To party) can claim ITC of the tax charged by the buyer on Invoice 2, once the goods are received and all normal ITC conditions are met.
The key point is that credit is taken based on who is billed, not just where the goods are physically delivered. Proper documentation – correct GSTINs, clear “Bill To” and “Ship To” addresses on invoices, matching e way bill details and timely reflection in returns – is critical to avoid ITC disputes during audits or reconciliations.
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Conclusion
A single e-way bill needs to be generated when goods are being transported to a different location owned by the same buyer. Two e-way bills must be generated if the registered person purchasing the products and the one accepting delivery of those goods have different addresses.You can easily generate e-way bills, even in bulk, using BUSY E-Way Bill Software , while maintaining compliance with ‘Bill to’ And ‘Ship to’ requirements.
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I am a chartered accountant with over 14 years of experience. I understand income tax, GST, and balancing financial records. I analyze financial statements and tax codes effectively. However, I also have a passion for writing, which is different from working with numbers. Recently, I started writing articles and blog posts. My goal is to make finance easier for everyday people to understand.
Frequently Asked Questions
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How does 'Bill to' and 'Ship to' affect E-Way Bill generation?In 'Bill to - Ship to' cases, you must enter the billing party and the actual delivery address correctly while generating the E-Way Bill. The transport details must reflect the actual movement of goods.
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Who is responsible for generating the E-Way Bill in these cases?Usually, the person who causes the movement of goods is responsible. In 'Bill to - Ship to', either the supplier or buyer can generate the E-Way Bill depending on the agreement and transaction type.