Compliance With ‘Bill to’ And ‘Ship to’ in E-way Bill

In a Bill to - Ship to transaction, one party is billed, but the goods are delivered to another party or location as per instructions. The law treats this carefully for place of supply, invoicing, e-way bill and ITC. Here are some simple, practical examples.

1. Third party supply to customer

• A (distributor) in Delhi orders goods from B (manufacturer) in Haryana.
• A asks B to ship directly to C (retailer) in Delhi.
• B issues invoice to A (Bill to: A, Ship to: C).
• A then issues separate invoice to C for his sale margin.

2. Head office ordering for branch

• Head Office (HO) of a company in Mumbai orders goods from a vendor in Gujarat.
• HO instructs vendor to deliver goods directly to its branch in Pune.
• Vendor issues invoice to HO (Bill to: HO, Ship to: Pune branch).
• HO records purchase and then passes stock transfer / internal entry to the branch in its books.

3. Trading company arranging direct dispatch from original supplier

• Trader A in Chennai gets an order from customer C in Hyderabad.
• A does not keep stock. He orders from manufacturer B in Coimbatore and tells B to directly ship to C.
• B issues invoice to A (Bill to: A, Ship to: C).
• A issues his own invoice to C and shows corresponding outward supply in his GST returns.

4. Multiple units of same company

• Company has Plant 1 and Plant 2 under same GSTIN.
• It orders equipment from a vendor and asks him to bill the registered office but ship to Plant 2.
• Vendor uses Bill to - Ship to format so that one GSTIN is billed, but delivery location is correctly shown.

In all such cases, the law allows ITC for the party billed, even though physical delivery happens at another place, as long as other conditions are satisfied.

E-way bill responsibility depends on who is the supplier on the invoice and who is actually moving the goods. In Bill to - Ship to models, the portal also supports special fields for this.

1. Supplier generates e-way bill with Bill to - Ship to

• Most common method.
• Manufacturer or vendor (B) generates e-way bill.
• Bill to: the buyer who is invoiced (A).
• Ship to: the actual delivery party/location (C).
• Only one e-way bill is generated for the physical movement of goods from B to C.

2. Transporter generates e-way bill

• If supplier does not generate e-way bill, transporter can generate it using supplier invoice details.
• Again, Bill to is A, Ship to is C.
• This is common where small suppliers do not handle e-way bill themselves and use transporter support.

3. Second leg invoice without physical movement

• A’s sale to C is often a paper sale (billing only) if goods move directly from B to C.
• In such cases, there is usually no second physical movement, so no second e-way bill is required for A to C, because the goods are not moving again.
• A still has to show his outward supply in GSTR-1 and 3B.

4. Separate movement after first delivery

• If C later sends goods back to A or to another person, that is a new movement.
• The person responsible for that new movement must generate a fresh e-way bill based on the new supply/return document.

Simple thumb rule.

Whoever is responsible for the current physical movement of goods and is shown as supplier in that leg will generate the e-way bill (or get it generated through transporter), using correct Bill to and Ship to details.

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.

In Bill to - Ship to, a common doubt is. “Can the party who is billed but never physically received the goods take ITC?” The answer is yes, if GST conditions are met, because the law treats delivery to another person on instruction as deemed receipt.

ITC eligibility for the billed party (A)
The party whose GSTIN is on the tax invoice as recipient can claim ITC if:

• It is a registered person under GST.
• Goods or services are used or intended to be used in its business.
• Supplier has paid tax to the government and reported it correctly.
• Invoice appears in GSTR-2B or is otherwise eligible as per rules.
• Other usual conditions (not blocked credit, within time limit etc.) are met.

Physical receipt is treated as satisfied if:

• Goods are delivered to another person on the direction of the registered person (i.e., Bill to - Ship to).

Key documentation to keep ready

For safe ITC claim and audit defence, the billed party should keep.

• Tax invoice from supplier clearly showing.
• • Bill to: correct name, address and GSTIN.
  • Ship to: actual delivery address and party.
• Transport documents / e-way bill, if applicable, linking to the same invoice.
• Any purchase order / email instruction showing that goods were to be delivered to C on A’s behalf.
• Accounting entries showing goods as purchased by A and sold/issued to C (or transferred to branch).

When documentation and flow of transactions are clear, ITC is generally allowed to the party who is billed, even though it never physically touched the goods.

Bill to - Ship to is powerful but can easily go wrong if not handled carefully. Some common pitfalls and safe practices are given below.

Common compliance pitfalls

1. Wrong or incomplete GSTIN details

• Bill to party’s GSTIN is mistyped or belongs to another state.
• This can cause ITC mismatch and notices later.

2. Mismatch between invoice and e-way bill

• Invoice shows one Bill to - Ship to combination.
• E-way bill shows different details or only one party.
• Officers may treat it as incorrect documentation during checks.

3. Double or missing e-way bills

• Generating two e-way bills for the same physical movement or forgetting to generate any.
• Both can create problems during movement or during departmental verification.

4. Wrong party claiming ITC

• Goods are billed to A but C wrongly claims ITC, because the goods were delivered to his premises.
• Later, 2B and books do not match, and department may deny ITC to C and question A.

5. Poor record of instructions and internal flow

• No written record of A instructing supplier to ship to C.
• Difficult to prove in scrutiny that goods were delivered on A’s direction.

Best practices for businesses and CAs

1. Standard formats for Bill to - Ship to invoices

• Use clear fields for Bill to and Ship to in your billing and accounting system.
• Ensure both are printed cleanly on invoice and match e-way bill data.

2. Strong master data control

• Verify GSTIN, legal name and address of Bill to and Ship to parties from reliable records before first transaction.
• Lock these masters so that casual changes are not made during invoice creation.

3. Link e-way bill and invoice at creation time

• Generate e-way bill directly from your billing or accounting software wherever possible.
• This reduces chances of data mismatch between invoice and e-way bill.

4. Clear ITC policy

• Decide and document that only the billed party will claim ITC.
• Explain this to all branches and customers so that nobody else claims the same credit.

5. Maintain paper trail of instructions

• Keep purchase orders, emails or agreements showing why goods were shipped to a different location.
• This helps show that delivery to C was actually on A’s direction, supporting deemed receipt for ITC.

6. Periodic reconciliation

• Regularly match GSTR-2B with purchase register for Bill to - Ship to cases.
• Resolve mismatches with suppliers early, so that issues do not pile up at year end.

Handled properly, Bill to - Ship to helps businesses save time and transport cost without breaking the credit chain. With correct invoicing, e-way bill generation and clear documentation, CAs can keep these transactions fully compliant and ITC safe.

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.