Bill to Ship to mode of supply may involve more than three parties

Facts of the case:
A (Applicand, he mads to B egistered persan, B further selsitistered person), who final sell to the ultimate customer. A
is an associate enterpnise of C. The manufactured goods would be dispatched directly from A to the ultimate customer. The Applicant sought clarification on the following issues:

Whether the supply from Applicant to the ultimate customer on “Bil to Ship to” mode is permissible under IGST Act?

Whether on the E way bil generated by the Applicant, the name of the ultimate customer is permissible in the column of ship to?

Whether in this case the valuation proisions of CGST Act read with the Rules for transactions between related parties would apply with availability of full ITC?

Findings and Rulings:

As per the provisions of IGST Act, “where the goods are delivered by supplier to a recipient or any other person on the direction of a third persor, either transfer of documents of titie or otherwise, it shall be deemed that the said third person has received the goods, and the place of supply shall be the principal place of business of such person”;

In the present case, the cycle of supply of goods from the applicant to the ultimate customer, involves four persons. However, the above mentioned provision nowhwere limit the transaction to only three partiese/person. It only contemplates the role of ‘third party’. Therefore, the supply from A to the uilimate customer is permissible under the provision of the IGST Act.

The Press Note dated 23.04.2018 on “Issues regarding Bill to Ship to for E-way bil under CGST Rules 2017” clearly mentions that only a single e-way bill is to be issued either from the supplier of the goods or by third party.

In the present case, A can issue an e-way bil in which the name of B and the final customer wil be mentioned in the column of ‘bill’ to and ‘ship to’ respectively.

The secound Proiso of Rule 28 of CGST Rules provides that where the recipient is eligible for full input tax credit, the value of the transaction shill be the full invoice value.

In the present case, since al the three parties A B and C are registered taxpayer, the transaction between A to B and B to C shall be in full invoice value with eligiblity of full ITC.


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