Understanding 'Bill To, Ship To' Transactions for E-Way Bill Compliance

Businesses often sell products to one entity while arranging delivery to a separate address. When the delivery point differs from the buyer's registered office, this scenario is classified as a "bill-to-ship-to" transaction under GST. Carefully managing these distinct 'Bill To' and 'Ship To' addresses is crucial during invoice generation and E-way bill creation.

Goods Delivery to Alternative Locations

Goods are occasionally transported to a destination other than the buyer's primary registered address. Several specific situations might lead a buyer to request delivery at an alternate site or to a third party:

• A buyer might need goods delivered to a warehouse located separately from their registered office.
• A trading business may instruct the direct shipment of goods from the supplier to one of its customers.
• Deliveries could be requested for specialized storage facilities, such as cold storage or customs warehouses.
• A buyer might arrange for goods to be sent to an institutional client at a different location, for whom the goods have already been sold.
• If the buyer's customer is a retail chain, deliveries might be directed to multiple individual outlets.

In all these scenarios, the 'Bill To' and 'Ship To' addresses on the GST invoice will diverge. The customer's registered office serves as the billing address, while goods are dispatched to an alternative shipping address. When generating the E-way Bill for such transfers, it is mandatory to specify the buyer's GSTIN and the precise delivery location. The designated delivery location must be the actual point where goods are received, not the billing address, if these differ.

'Bill To' and 'Ship To' Scenarios in E-Way Bills

Scenario 1: Same GSTIN, Different Delivery Address

This scenario involves distinct 'Bill To' and 'Ship To' addresses, yet the delivery is ultimately intended for the same legal entity, identifiable by the same GSTIN. Such a situation typically arises when a buyer directs the supplier to ship goods to one of their own warehouses or storage sites. Essentially, it represents a movement of goods from the supplier directly to an additional business location of the buyer, rather than their primary registered office.

For instance, a shoe retailer, Ashish, headquartered in Mumbai, manages several warehouses across Maharashtra for efficient supply chain operations. He purchases 2,000 pairs of shoes from Black Soles Pvt. Ltd. in Nashik, Maharashtra, for onward sale. Ashish requests the supplier to deliver this consignment to his Pune warehouse. Here, while Ashish's Mumbai office is "Billed To," the "Ship To" address is his Pune warehouse. The GST invoice must explicitly state both 'Bill To' and 'Ship To' addresses. Since both locations are within Maharashtra, this constitutes an intra-state transaction, attracting CGST and SGST. The E-way Bill must accompany the goods during transport.

Scenario 2: Different GSTINs, Third-Party Delivery

In this situation, the 'Bill To' and 'Ship To' addresses diverge, and the consignment is delivered to a distinct individual or entity possessing a different GSTIN. This typically occurs when a supplier dispatches goods directly to the buyer's customer, effectively a third party.

Building on the previous example:

Case 1: Intra-State Third-Party Delivery

Instead of his own warehouse, Ashish asks Black Soles Pvt. Ltd. to send the shoes directly to Vijay, a wholesale customer of Ashish's, also located in Pune, Maharashtra.

• Since separate GSTINs are involved for each party, two invoices are necessary: one from Black Soles Pvt. Ltd. to Ashish, and another from Ashish to Vijay.
• Both transactions are intra-state, meaning CGST and SGST will apply to both invoices.
• The E-way Bill regulations remain consistent with the previous scenario because only a single physical movement of goods occurs. Therefore, only one E-way Bill needs to be generated, either by Black Soles Pvt. Ltd. or by Ashish in Mumbai, for the transfer of shoes to Vijay in Pune.

Case 2: Inter-State Third-Party Delivery

If, in the same example, Ashish had directed the shoes to Vijay, his wholesale customer in Vijayawada, Andhra Pradesh, the invoice issued by Ashish would have included IGST. This is because the place of consumption (Andhra Pradesh) differs from the place of supply (Mumbai, Maharashtra).

It is important to note that only one E-way Bill is required since the physical movement of goods remains a single instance.

E-Way Bill Generation Responsibilities

The "Bill To Ship To" supply model typically involves three distinct parties in a transaction:

• 'A' is the entity that instructs 'B' to dispatch goods directly to 'C'.
• 'B' is the supplier who sends goods directly to 'C' as per 'A''s instruction.
• 'C' is the final receiver of the goods.

This arrangement entails two separate supplies, necessitating the issuance of two distinct tax invoices:

• Invoice 1: Issued by 'B' to 'A'.
• Invoice 2: Issued by 'A' to 'C'.

Case 1: E-Way Bill Generated by 'B' (Supplier)

When 'B' generates the E-way Bill, the following fields in Part A of GST FORM EWB-01 must be completed:

Case 2: E-Way Bill Generated by 'A' (Intermediate Buyer)

If 'A' generates the E-way Bill, the following fields in Part A of GST FORM EWB-01 should be filled:

In summary, for goods transferred under the "Bill to Ship To" model, only one E-way Bill is required, even if the delivery location differs from the buyer's registered address.