“Bill Ship-to” Transactions under GST – One Mistake = ITC Loss

🔍 What is a Bill-to Ship-to Transaction?

A transaction where:

• 📄 Invoice (Bill-to) is raised on one party

• 🚚 Goods (Ship-to) are delivered to another party

👉 Very common in trading, EPC, textile, and inter-state deals

⚖️ Legal Provision

As per Section 10(1)(b) of the CGST Act, 2017

➡️ It is treated as two separate supplies for GST purposes.

🔄 How the Transaction Works

1️⃣ Seller → Bill-to Party (Deemed supply)

2️⃣ Bill-to Party → Ship-to Party (Actual delivery)

✔️ GST charged only once, but

✔️ Documentation must reflect both legs correctly

🧾 Mandatory Invoice Details

Invoice must clearly mention:

• ✔️ “Bill-to” name, GSTIN & address

• ✔️ “Ship-to” name, GSTIN & address

❌ Missing this = ITC may be denied to buyer

🚛 E-Way Bill – MOST COMMON ERROR

• Bill-to party → shown as Bill From

• Ship-to party → shown as Ship To

⚠️ Wrong selection = detention risk + penalty

❌ Common Mistakes Seen in Practice

• Single invoice but wrong ship-to details

• E-Way bill generated in seller’s name only

• No second invoice in chain transaction

• Wrong place of supply → wrong GST (CGST/IGST)

🧠 CA Practical Advice

“In Bill-to Ship-to cases, GST is less risky than documentation.

One wrong field can block ITC for months.”