IRIS GST Blogs

Generating E-way Bills under Bill To and Ship To scenario

(0 comments)

‘Bill-to and Ship-to’ is a common business scenario wherein the party to whom invoice is billed is different from the party actually receiving the goods or services. While reporting in GST returns and also for seamless transfer of Input tax credit, there are two invoices generated in the transaction.

Let us refer to the following example to understand the scenario better

Supplier A in Maharashtra sells some goods worth Rs.1,00,000/- attracting 5% GST and bills to customer B in Maharashtra. On instructions from customer B, the goods are to be supplied to C in Karnataka. Now as per GST rules, there will be two invoices - 

  1.  Invoice no A001 (for example) from Supplier A to Recipient B. As both A and B are in the same state, this will be an intra-state transaction and CGST and SGST will be charged.
  2. Invoice no B001 (for example) from B (who will be the supplier) to Recipient C (who is in a different state). In this case, IGST will be applied. It should be noted that here the value of goods will be based on what price B has charged to C for this transaction which could be different from what A charged to B
Now, as per rules, an E-way Bill Number is to be generated whenever there is any movement of goods subject to the certain conditions. In Bill-to and Ship-to scenario, though there are two invoices, the physical movement of goods is happening only once. Thus E-way bill needs to be created only once and could be based on either of the invoices. 
In Bill-to and Ship-to scenario, there are four places and parties. A look at the information included for the generation of E-way bill on the portal, it is clear that following persons and places are needed –

Party /Place

Meaning

Bill-from party and place

The person who supplies the goods

Dispatch-from party and place

The person/place from where the goods are dispatched. It could be the places from where the supplier operates

Bill-to party and place

The person who places the order and will be making the payment

Ship-to party and place

The person/place who will be actually receiving the goods

Here, either the supplier A or the other party B, can generate the E-way Bill Number. Using the same example, let us understand the details to be provided while generating E-way Bill Number

Who generates E-way Bill

A (Supplier)

B (Bill To Party)

Invoice to be used

A will generate E-way Bill using Invoice No A001 details.

B will generate E-way Bill using Invoice No B001 details.

Bill-from party and place

A - Maharashtra

B - Maharashtra

Dispatch-from party and place

A - Maharashtra

A - Maharashtra

Bill-to party and place

 

B - Maharashtra

C - Karnataka

Ship-to party and place

C - Karnataka

C - Karnataka

Who can reject the E-way Bill?

As GSTIN of B is present in the recipient data (Registered Bill-to Party), only B can reject the E-way Bill though C is the actual recipient of goods.

As GSTIN of C is present in the recipient data (Registered Bill-to Party), C can reject the E-way Bill.

Supply Type and Tax applicable as per GST law

For Invoice No. A001 it is Intrastate and hence CGST and SGST applicable.

For Invoice No. B001 it is Interstate and hence IGST applicable.

Impact on GSTR 1 if data is to be populated from E-way Bill

Invoice No B001 from B to C will not be present in E-way bill records and hence no auto-population for GSTR1 of B for this transaction.

Invoice No A001 from A to B will not be present in E-way bill records and hence no auto-population for GSTR1 of A for this transaction.

Other comments

On delivery, C will receive the E-way bill details as per invoice raised by A for B.

On delivery, C will receive the E-way bill details as per invoice raised by B for C only.

To sum up, the details to be provided for generating E-way bill are primarily determined by who is generating the E-way bill.

For further reading, you can refer to the press release detailing the Bill-to and Ship-to scenario here. The excerpt from E-way Bill FAQs on NIC portal is highlighted below

Q : How to handle "Bill to- Ship to" in E-way bill system?

A: Sometimes, the taxpayer raises the bill to somebody and sends the consignment to somebody else as per the business requirements. There is a provision in the e-way bill system to handle this situation, called as ‘Bill to’ and ‘Ship to’. In the e-way bill form, there are two portions under ‘TO’ section. On the left-hand side - ‘Billing To’ GSTIN and trade name is entered and in the right-hand side - ‘Ship to’ address of the destination of the movement is entered. The other details are entered as per the invoice. In case, ship to state is different from Bill to State, the tax components are entered as per the billing state party. That is if the Bill to location is inter-state for the supplier, IGST is entered and if the Bill to Party location is intra-state for the supplier, the SGST and CGST are entered irrespective of movement of goods whether movement happened within the state or outside the state.

Hope this article and the examples explain the Bill-to and Ship-to scenario and its impact on E-way bill. In our next articles, we’ll go through the Bill-from and Dispatch-from scenario and how it relates to Bill-to and Ship-to transaction.

IRIS is an established GST Suvidha Provider (GSP) and was one of the first GSPs to complete the integration with NIC’s E-way Bill System. Our E-way Bill solution, branded as IRIS Topaz, is an end-to-end solution for entire E-way Bill operations. IRIS Topaz can be accessed through the web, desktop utility, and APIs.  

You can avail our 15-day free trial offer of the full version of IRIS Topaz. You can enroll for a free webinar here. For further details please write to support@irisgst.com or visit our site https://irisgst.com

 

About Vaishali Chheda

Vaishali Dedhia, a Chartered Accountant, has been working with IRIS for over 6 years and is currently the lead Functional Analyst and Subject Matter Expert for IRIS' GST offerings. She has also been assisting the clients in return filing related queries. Prior to GST, she was involved in compliance and data analysis for the US markets. In her leisure time, Vaishali likes reading novels, listening music and hanging around with friends, family.

Current rating: 5
Share:

Comments

There are currently no comments

New Comment

required

required (not published)

optional

required