₹ 2 lakh – ₹ 80 lakh
Check your pre-approved business loan
Enter mobile and OTP | Check offer | Know your exact loan terms
-
In a Bill to–Ship to transaction, three parties are typically involved. First is the buyer (referred to as the "bill-to" party) who places the order and receives the invoice. Second is the supplier, who ships the goods directly to the third party—the final recipient (known as the "ship-to" party). Although the buyer is invoiced for the goods, they are not the one receiving them. This arrangement is common in industries like retail, distribution, and manufacturing where logistics need to be streamlined. In such cases, two separate invoices are usually raised: one from the supplier to the buyer, and another from the buyer to the end customer. This model is fully compliant under GST when documented and reported correctly.
Determining place of supply in bill to–ship to transactions
-
As per Section 10(1)(b) of the IGST Act, the place of supply in a Bill to–Ship to transaction is the location of the buyer (the person who gives the instruction to deliver the goods). This is the case even if the goods are delivered somewhere else.
For example:
- If the supplier and buyer are in the same state, CGST and SGST are charged.
- If they are in different states, IGST is applied.
Let’s say A (based in Maharashtra) asks B (a supplier in Gujarat) to deliver goods to C (a customer in Delhi). Even though the delivery is in Delhi, the place of supply is Maharashtra, and B will charge IGST to A. Businesses often use a GST calculator to estimate the applicable tax liability in such inter-state bill to–ship to transactions.
E-way bill requirements for bill to–ship to
An e-way bill is mandatory if the value of the goods being transported is over Rs. 50,000. Only one e-way bill needs to be generated for the entire transaction, even though there are two invoices.
The e-way bill should include:
- Part A: Invoice number, value of goods, GSTIN and addresses of both the buyer and the final recipient.
- Part B: Transporter details such as vehicle number or transporter ID.
It’s important that both billing and shipping addresses are clearly mentioned to avoid confusion or non-compliance. You can read more about e-way bill.
Responsibility for e-way bill generation
-
Party Who prepares it Key details included Supplier (B) If they are arranging the transport - Bill From: Supplier (B)
- Dispatch From: Where goods start
- Bill To: Buyer (A)
- Ship To: Recipient (C)
Buyer (A) If they arrange the transport - Bill From: Buyer (A)
- Dispatch From: Supplier’s location
- Bill To: Customer (C)
- Ship To: Customer (C)
Only one e-way bill is needed per consignment. The responsibility for e-way bill generation lies with the party who is managing the transportation of goods.
Input Tax Credit (ITC) implications in bill to–ship to
| Scenario | Who claims ITC | Based on |
|---|---|---|
| Supplier to Buyer (B → A) | Buyer (A) | Supplier’s invoice |
| Buyer to Recipient (A → C) | Recipient (C) | Buyer’s invoice |
In these transactions, the buyer (A) can claim Input Tax Credit even if the goods are sent directly to someone else (C). Similarly, the final recipient (C) can claim ITC based on the invoice raised by the buyer once the goods are received. However, both parties must ensure proper documentation and fulfilment of GST conditions.
Check your pre-approved business loan offer
Conclusion
Understanding how Bill to–Ship to transactions work under GST is important to ensure compliance with tax regulations. Correct determination of place of supply, accurate invoicing, timely e-way bill generation, and proper handling of Input Tax Credit can help avoid penalties and make business operations smoother.
If you are planning to expand your business or need working capital for managing such transactions, you can consider applying for a business loan to support your financial needs.
Get business loan for your needs
Women Business Loan
Get Women Business Loan upto 80 Lakh
Medical Store Business Loan
Get Medical Store Business Loan upto 80 Lakh
Manufacturer Business Loan
Get Manufacturer Business Loan upto 80 Lakh
Our loan variants
Loans for business needs
Select loan by amount
Business loan in different cities
Business loan in bangalore
Business loan in mumbai
Business loan in pune
Business loan in Jaipur
Business loan in Kerala
Business Loan in Telangana
Business Loan in Surat
Business Loan in Ranchi
Business Loan in Odisha
Business Loan in Noida
Business Loan in Kolkata
Business Loan in Karnataka
Business Loan in Hyderabad
Business Loan in Gujarat
Business Loan in Coimbatore
Business Loan in Assam
Business Loan in Ahmedabad
Business loan for different budgets
2 lakh business loan
3 lakh business loan
5 lakh business loan
10 lakh business loan
15 lakh business loan
20 lakh business loan
25 lakh business loan
30 lakh business loan
50 lakh business loan
Types of business loan
Unsecured Business Loan
Secured Business Loan
Term Loan
Cash Credit
Working Capital Loan
Machinery Loan
Line of Credit
Micro Loan
Merchant cash Loan
Frequently Asked Questions
Overview
What is the difference between 'Bill To' and 'Ship To' addresses in GST?
In GST, the 'Bill To' address is where the invoice is sent — usually the buyer who pays for the goods. The 'Ship To' address is where the goods are delivered — often a different party. These two addresses differ in bill to–ship to transactions, which are common in trade and logistics.
What is a 'Bill to Ship to' transaction in GST?
A 'Bill to–Ship to' transaction involves three parties: the buyer (who is billed), the supplier (who ships the goods), and the final recipient (who gets the goods). Though the buyer receives the invoice, they do not get the delivery. This method is common in retail and manufacturing, and is fully valid under GST rules.
How to prepare a bill to ship an e-way bill?
To prepare an e-way bill for a bill to–ship to transaction, fill in Part A with the invoice number, goods value, GSTINs, and addresses of both buyer and recipient. Part B must include vehicle or transporter details. Only one e-way bill is needed, and the party arranging transport is responsible for generating it.
More articles
Disclaimer
Bajaj Finance Limited has the sole and absolute discretion, without assigning any reason to accept or reject any application. Terms and conditions apply*.