GST Library

Login | Register

Best GST Library

Contact Us

Subscription Plans

GST News | Updates

GST Calendar

GST Diary

GST Case Laws

GST Case Laws Sitemap

GST Notifications, Circulars, Releases etc.

Act & Rules

Act & Rules (Multi-view)

Act & Rules (E-book)

GST Rates

GST Rates (E-book)

HSN Classification

GST Council Meetings

GST Set-off Calculator

ITC Reversal Calculator

E-invoice Calculator

Inverted Duty Calculator

GSTR-3B Manual

GSTR-9 Manual

GSTR-9C Manual

GST Forms

Full Site Search

E-way Bill

Finance Bill

GST Evasion in India

GST Videos

About Us

Contact Us

Our Services


GST e-books

GST Domains Sale

TaxReply India Pvt Ltd
®
Subscribe Free GST updates on...

Join on twitter

Join GST Group 123

Place of Supply of Goods in case of Bill To Ship To transactions

Deeming Fiction

Section 10 - Place of supply of goods other than supply of goods imported into, or exported from India

10.

(1) The place of supply of goods, other than supply of goods imported into, or exported from India, shall be as under,––

...

(b) 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;

...

 

How to determine Place of Supply of Goods in case of Bill to Ship to transactions?

Clause (b) of sub-section (1) of section 10 of IGST Act is the governing rule for deciding place of supply in case of bill to ship to transactions. This clause creates a deeming fiction and focus on the person from where directions for delivery is coming rather than focusing on place of actual delivery. As per this clause, place of actual delivery is to be ignored while deciding nature of transaction and GST is charged as per the location of person giving directions for delivery. 

Below are some examples for better understanding of above provision. 

Ex 1) 

Supplier of Delhi (A) receives an order from Buyer of Maharashtra (B) but buyer directs the supplier to directly deliver the goods to one of its customer located in Delhi (C).

(Bill to B in Maharashtra & Ship to C in Delhi)

Location of Supplier – Delhi

Place of Supply – Maharashtra (Although goods have been actually delivered to C in Delhi, but supplier did the same on the direction of B, therefore it shall be deemed that B has received the goods and place of supply shall be the principal place of business of B i.e. Maharashtra)

Nature of Supply – Inter State Supply

Type of GST applicable - IGST

 

Ex 2)

Supplier of Delhi (A) receives an order from Buyer of Delhi (B) and buyer directs the supplier to deliver the goods to one of its customer located in Maharashtra (C).

(Bill to B in Delhi & Ship to C in Maharashtra)

Location of Supplier – Delhi

Place of Supply – Delhi (Although goods have been delivered to C in Maharashtra,  but supplier did the same on the direction of B, therefore it shall be deemed that B has received the goods and place of supply shall be the principal place of business of B i.e. Delhi)

Nature of Supply – Intra State Supply

Type of GST applicable – CGST & SGST
 

Whether clause (b) applies to branches also?

If, in the above examples, C is the branch of B instead of its customer, then also clause (b) would come into play. Under GST regime all branches located in different states are treated as distinct persons and are under compulsion to get separate GST Number. Therefore clause (b) would apply in case of branches also. 

Now ideally B would raise an invoice on its branch C to transfer the credit of GST into the hands of C. And B would also charge IGST on the same.

(Ex-1)

(Ex-2)

 


Best-in-class
Digital GST Library
Plan starts from
₹ 3,960/-
(For 1 Year)
Checkout all Plans
Unlimited access for
365 Days
✓ Subscribe Now
Author:

TaxReply


Aug 21, 2020

Comments


Bill to ship case is applicable only on material . Shall we use same or manpower supply service.
By: Ashish Bajoai
Aug 21, 2020
Replied to Ashish Bajoai
Yes.
By: Sumit Chakraborty
Aug 22, 2020
Nice article . Keep it up👍
By: Jitendra Kumar Dagar
Aug 21, 2020
what will be treatment for E-way Bill in this Case (Bill to Ship to) ?
By: Kamlesh Kumar
Aug 21, 2020
Very good explained. also explain treatment of eway bill.
By: Satish Chand Garg
Aug 21, 2020
firm in Gurgaon supplied goods to Telangana on the instructions of dealer in west Bengal under Bill to ship to basis.
But by mistake Place of Supply mentioned Telangana instead of West Bengal. Now dealer of west Bengal to whom bill has been raised during 19-20 could not get IGST Input after his case has been opened by the dept. What is the solution here
By: Krishna Agencies
May 30, 2024


Post your comment here !

Login to Comment


Other Important GST Updates


  Read more GST updates...

15
Jun
S
M
T
W
T
F
S
20 Jun

☑ Monthly | GSTR-3B

GSTR-3B for the m/o May 2024 (Monthly Taxpayer - Rule 61) - Either Compulsory taxpayer > 5 cr. or Voluntary taxpayer < 5 cr.

☑ Monthly | GSTR-5A

GSTR-5A for the m/o May 2024 [Return by OIDAR Service Providers - Rule 64.]

25 Jun

☑ Monthly | PMT-06

PMT-06 Monthly tax payment for May 2024 under QRMP Scheme [Rule 61(1)(ii) - Proviso to Section 39(7)].

Taxpayers have a choice to pay tax either, as per -  

A) Fixed Sum Method OR 
B) Self assessment basis subject to interest on short payment of taxes.
(Notification No.85/2020 - CT)
 
28 Jun

☑ Monthly | GSTR-11

GSTR-11 for the m/o May 2024 (Statement of inward supplies by persons having Unique Identification Number (UIN)).