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Issues Regarding “BILL TO SHIP TO TRANSACTION”

Issues Regarding Bill to Ship to Transaction

Bill to ship to transaction is one where a buyer asks seller to send goods directly to ultimate buyer.
For example, X placed an order with Y to supply goods directly to Z.

In case of Bill to Ship to Transaction people are confused about generating e-way bill. Earlier the procedure provided by GST department required the generation of 2 e-way bills by both X and Y. But now the procedure is changed and only single e-way bill is required which can be generated either by X or Y.

What is Bill to Ship to Supply?

It means a supply where buyer is not the recipient of goods. Here goods are not sent to premises of buyer but to another person to whom buyer ha sold the goods.

Understanding of the concept with an example:

Mr.X placed an order with Mr. Y to supply goods to Mr.Z. This transaction of supply falls under the definition of Bill to Ship to Supply.

Here Mr. X is a buyer who is buying from Mr Y and Mr. X has already sold goods to Mr.Z. Now Mr.X has requested Mr. Y to deliver goods directly to Mr.Z.

We can break a transaction as:

  • Mr. X is the person who has ordered Mr. Y to send goods directly to Mr. Z.
  • Mr. Y is the person who is sending goods directly to Mr. Z on behalf of Mr.X.
  • Mr.Z is the recipient of goods.

There are 2 invoices involved in Bill to Ship to Transactions:

Invoice-1: issued by Mr.Y to Mr.X

Invoice-2: issued by Mr.X to Mr.Z

Who should issue E-way bill in case of Bill to Ship To supply?

In case of Bill to Ship to Transaction either of suppliers can generate e-way bill, where they are generated by billed to party and supplier. To understand with an example, Mr.X or Mr. Y can generate e-way bill. If both are not registered under GST then Mr. Z can generate e-way bill.

How to generate E-way bill for Bill To Ship To Transaction?

To generate e-way bill we need to visit GST E-way bill portal. Login to your account with user id and password. As discussed earlier that E-way bill can be generated by both suppliers, you need to fill E-way bill form differently in both the cases.

CASE 1. E-way bill generated by Supplier (Mr.Y)

The following fields shall be filled in Part A of GST FORM EWB-01:

Bill From: In this field details of Mr.Y 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 Mr.Y.
Bill To: In this field details of Mr.X are supposed to be filled.
Ship to: In this field address of Mr.Z is supposed to be filled.
Invoice Details: Details of Invoice-1 are supposed to be filled

Case 2 E-way bill is generated by Buyer (Mr.X)

The following fields shall be filled in Part A of GST FORM EWB-01:

Bill From: In this field details of Mr.X 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 Mr.Y.
Bill To: In this field details of Mr.Z are supposed to be filled.
Ship to: In this field address of Mr.Z is supposed to be filled.
Invoice Details: Details of Invoice-2 are supposed to be filled

The entire E-way bill cycle for these transactions looks completed. Earlier there was requirement to generate 2 E-way bills for these transactions. However in the future we will see more improvements in GST structures and rules.

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