Timing of Tax Invoice Issuance in Bill-to-Ship-to Transactions under GST

[Chitresh Gupta]

"In a "Bill to Ship to" transaction under GST, when should the supplier (bill to party) issue the tax invoice: before the actual movement of the goods or after delivery? Consider Section 31(1) of the CGST Act, which stipulates that the invoice must be issued before or at the time of removal of goods for supply when the supply involves movement, or at delivery/making available in other cases. What is the correct timing for invoice issuance in such transactions?"

[Sadanand Bulbule]

Refer:  Section 10(1)(b) of IGST Act

Yes — the supplier (the “bill-to” party) should issue the tax invoice before or at the time of removal of goods if there is physical movement of goods in that supply.

If for some reason there is no movement (goods already at recipient or available), then the invoice can be issued before or at delivery/making available.

[Sadanand Bulbule]

For more details, refer:

Press Information Bureau

Government of India

Ministry of Finance

23 APR 2018 

Issue regarding “Bill To Ship To” for e-Way Bill under CGST Rules, 2017

[Pinnacle Tax Advisor]

In the case of a Bill-to-Ship-to transaction, the invoice must be issued within the timeline prescribed under Section 31 of the CGST Act, 2017. For goods involving movement, the invoice should be raised on or before the commencement of such movement.

Under the Bill-to-Ship-to model, the actual supplier issues the invoice to the intermediate buyer while shipping the goods directly to the final recipient. Although the goods can be delivered to the final buyer based on the invoice and e-way bill issued by the actual supplier, the intermediate buyer is also required to issue an invoice to the final buyer on or before the movement of goods. Any delay in issuing the invoice may attract interest and penal provisions.

[Ganeshan Kalyani]

Invoice should be raised before or at the time of supply. So, when goods has moved from first supplier the recipient (Bill To party) can raise invoice on recipient of goods (Ship To party). 

[Shilpi Jain]

If there is movement of goods then invoice to be issued before removal of goods.

AI Summary

Bill-to-Ship-to transactions: invoice must be issued before or at removal of goods when movement occurs, or at delivery if no movement.
Where the supply involves physical movement of goods, the tax invoice must be issued by the supplier before or at the time of removal; if goods are already with the recipient or are made available without movement, the tax invoice may be issued before or at delivery or making available.