As per section 10(1)(b) of IGST Act Where the goods are delivered by the supplier to a recipient or any other person on the direction of a third person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to the goods or otherwise, it shall be deemed that the said third person has received the goods and the place of supply of such goods shall be the principal place of business of such person – Section 10(1)(b) of IGST Act.

In case of such sale, if supplier and third party are in different States, the supply will be inter-state even if goods are delivered in the same State to final customer on direction of third party. The supplier will charge IGST to third party ( the person who actually give the instruction for supply ) even if physically goods do not go out of State.

Similarly, if supplier and third party are in same State, the supply will be intra-state even if goods are delivered to final customer in different State on direction of third party. The supplier will charge CGST and SGST to third party (the person who actually give the instruction for supply ) even if physically goods are going out of the State.

The term ‘ third party ‘ used in the Act creates confusion. This third party is actually a buyer for all the practical purposes. The recipient is mere a consignee who will received the goods.

Preparation of E way Bill for Bill to Ship to model was a big challenge for the trade & industry .There was practical difficulty in preparation of two e way bill in order to cover entire transaction in this type of e way bill Model.

The issue has been clarified in CBIC press release dated 23-4-2018 and this clarification is great relief for trade & industry . It is clarified that one e-way bill need to be prepare for Bill To Ship To model of supplies instead of two e-way bills.

According to Press Release Bill To Ship To Model for e-Way Bill under CGST Rules, 2017 are as under:

1. In a typical “Bill To Ship To” model of supply, there are three persons involved in a transaction, namely:

  • “A” is the person who has ordered “B” to send goods directly to “C”.
  • “B” is the person who is sending goods directly to “C” on behalf of “A”.
  • “C” is the recipient of goods.

ABC

2. In this complete scenario two supplies are involved and accordingly two tax invoices are required to be issued:

  • Invoice -1, which would be issued by “B” to “A”.
  • Invoice -2 which would be issued by “A” to “C”.

3. Queries have been raised as to who would generate the e-Way Bill for the movement of goods which is taking place from “B” to “C” on behalf of “A”. It is clarified that as per the CGST Rules, 2017 either “A” or “B” can generate the e-Way Bill but i t may be noted that only one e-Way Bill is required t o be generated as per the following procedure:

Case -1: Where e-Way Bill is generated by “B”, the following fields shall be filled in Part A of GST FORM EWB-01:

1 Bill From: In this field details of “B” are supposed to be filled.
2 Dispatch from: This is the place from where goods are actually dispatched. It may be the principal or additional place of business of “B”
3 Bill To: In this field details of “A” are supposed to be filled.
4 Ship to: In this field address of “C” is supposed to be filled.
5 Invoice Details: Details of Invoice-1 are supposed to be filled

Case -2: Where e-Way Bill is generated by “A”, the following fields shall be filled in Part A of GST FORM EWB-01:

1 Bill From: In this field details of “A” 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 “B”.
3 Bill To: In this field details of “C” are supposed to be filled.
4 Ship to: In this field address of “C” is supposed to be filled.
5 Invoice Details: Details of Invoice-1 are supposed to be filled.

Bill From – Dispatched From

There may be another situation arises where invoices is prepared at one place while goods are dispatched from other place ie godown or place of job worker. In that situation, part A of e-way bill has two portions under ‘FROM’ section in left side. In ‘Bill From’, supplier’s GSTN and name is entered and in right side, details of the godown / job worker’s place where actually goods are being dispatched , need to be entered . The right side coloum in From Section is captioned as ‘Dispatched From’ In this case, tax is charged on basis of Bill from State even if goods are actually dispatched from other State.

The other details are entered as per invoice.

CONCLUSION:. It is pleased to note that CIBC after receiving number of representations for seeking clarifications in relation to requirement of e-Way Bill for “Bill To Ship To” model of supplies, considering the difficulty of trade & Industry issue a practical clarification with example by way of solution is in line of ease of doing business.

Author- Dr. Shailendra Saxena | B.COM, ACS, FCMA, FCA, DISA (ICAI), Ph.D | Chartered Accountant | Email:saxena20535@yahoo.com | Cell:09377410260

(Republished with Amendments. Amendments been made by CA Anita Bhadra)

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6 Comments

  1. Rajes says:

    I party-A( who is at telangana) ordered to material PartyB( at gujarat) and to send material to party C(who is at Andra Pradesh)..
    Who should generate the EWay bill and how it be done and can any one suggest please

  2. RAHUL says:

    Sir,

    A Party (gujarat) send order to B Party (Maharashtra).
    B party send goods to Adani Port At CHA address, mundra Gujarat for behalf for A party Export from Adani Port Gujarat than

    Guide which name mention E-way bill to and ship to and in invoice ?

  3. SUNIL B MUNDADA says:

    SIR

    THE MODULE BILL TO SHIP TO PARTY IS GOOD FOR DOING IN BISUNEE BUT IN CEMENT TRADE ONE THING SHOULD ALSO CRELRIFIED AS A ORDERS B TO SUPPLY TO C & THE C DILIVERS THE SAME GOOD TO A SITE OF CONSTRUCTION AWAY FROM HIS PRINCIPAL PLACE OF BISUNESS IS 20 KM WHATE SHOULD BE DONE IN THISE STIACTION

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