E-way bill rules for Bill To Ship To transactions

A corporate buyer orders industrial valves from an engineering distributor in Ahmedabad. The distributor does not manufacture these valves locally; instead, they place a back-to-back purchase order with a foundry in Rajkot, instructing the foundry to dispatch the finished goods directly to the client factory in Surat. Two separate commercial sales take place simultaneously, yet the physical goods travel only once along the highway from Rajkot to Surat.

Accountants frequently struggle with two questions in this structure: which party must generate the e-way bill, and will road inspection officers detain the truck if the driver carries an invoice addressed to one entity while the delivery destination bears another company name? Tax officers also check whether the middle buyer can take input tax credit before the goods reach their own premises.

Statutory framework under Rule 138 and Section 16(2)(b)

The legal basis for Bill To Ship To arrangements rests on Rule 138 of the CGST Rules read with Section 10(1)(b) of the IGST Act and Section 16(2)(b) of the CGST Act.

Under Section 10(1)(b) of the Integrated Goods and Services Tax Act, 2017, where goods are delivered by the supplier to a recipient or any other person on the direction of a third person, it is deemed that the third person has received the goods. The place of supply for this first leg is the principal place of business of that third person.

A common compliance concern is whether the ordering buyer satisfies the statutory condition of receipt of goods under Section 16(2)(b) to claim input tax credit. Explanation (i) to Section 16(2)(b) of the CGST Act resolves this point directly:

“it shall be deemed that the registered person has received the goods or, as the case may be, services: (i) where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise” Central Goods and Services Tax Act, Section 16(2)(b)

Because delivery to the end recipient is legally deemed as receipt by the ordering party, the ordering buyer can claim input tax credit on the invoice issued by the manufacturer, provided other requirements under Section 16 are met.

For related logistics workflows, see our guide on e-way bill multi-vehicle movement updates. If shipment delays occur on the road, review our instructions on e-way bill expiry extension under Rule 138.

Clarification on generation: CBIC press guidance

To eliminate trade confusion, the Central Board of Indirect Taxes and Customs issued a binding clarification through an official press statement on 23 April 2018 regarding Bill To Ship To transactions under CGST Rules, 2017 (view CBIC circulars and press archives). The release addresses the standard three-party structure:

• Party A (Buyer / Trader): The person who places the order with supplier B and directs B to ship goods directly to recipient C.
• Party B (Supplier / Manufacturer): The person who dispatches goods directly to recipient C on behalf of buyer A.
• Party C (Recipient): The final customer who physically receives the consignment.

In this workflow, two taxable supplies take place and two invoices are raised:

1. Invoice 1: Issued by supplier B to buyer A.
2. Invoice 2: Issued by buyer A to recipient C.

The 2018 press statement clarifies that either supplier B or buyer A can generate the e-way bill on the E-Way Bill System Portal. The party generating the bill must complete Part A of Form GST EWB-01 using one of two standardized field mappings.

Address mapping in Form GST EWB-01: Case 1 vs Case 2

The e-way bill portal separates origin into two fields (Bill From and Dispatch From) and destination into two fields (Bill To and Ship To). Correct entry depends on who generates the form:

In Case 1, supplier B generates the e-way bill against Invoice 1. Commercial confidentiality is preserved because end recipient C does not see the procurement rate charged by B to A on the e-way bill portal, though the driver must carry the document matching the e-way bill.

In Case 2, buyer A generates the e-way bill against Invoice 2. This structure is common when buyer A prefers to keep supplier B pricing hidden from the transporter or customer, or when buyer A manages the logistics contract directly.

Four-party transactions: Bill From Dispatch From variations

Complex distribution arrangements often involve four distinct entities or locations. Consider a multi-branch corporate structure, as analyzed under distinct-person valuation principles in CBIC Circular No. 199/11/2023-GST. A four-party structure arises in two common configurations:

• Job worker or external warehouse dispatch: Supplier B bills buyer A, but dispatches goods from a third-party job work facility (JW) directly to recipient C.
• Two-layer trade intermediary: Manufacturer M sells to wholesaler W1, who sells to dealer W2, who sells to client C, with goods moving directly from manufacturer M to client C.

When goods move from an external warehouse or job worker location, the party generating the e-way bill must enter the warehouse address in the Dispatch From field while keeping the supplier registration address in Bill From. The GST portal automatically calculates transport distance and validity based on the PIN codes entered in Dispatch From and Ship To, not the billing addresses.

Worked scenario: supplier A, buyer B, and recipient C

Let us examine a verified industrial transaction involving three states to understand tax charging, invoice preparation, and portal entry.

Apex Motors in Pune, Maharashtra (Supplier B, GSTIN 27AAACA1111A1Z1) receives an order from Vertex Machinery in Bengaluru, Karnataka (Buyer A, GSTIN 29AAACB2222B1Z2). Vertex Machinery instructs Apex Motors to ship the precision equipment directly to dynamic manufacturing client Orbit Works in Ahmedabad, Gujarat (Recipient C, GSTIN 24AAACC3333C1Z3).

The transaction details run as follows:

• Invoice 1 (Apex Motors to Vertex Machinery): Taxable value ₹10,00,000. Because supplier is in Maharashtra and buyer is registered in Karnataka, Apex Motors charges 18% IGST of ₹1,80,000. Total invoice value is ₹11,80,000.
• Invoice 2 (Vertex Machinery to Orbit Works): Vertex Machinery adds its margin and bills Orbit Works for a taxable value of ₹12,00,000. Because Vertex Machinery is in Karnataka and recipient Orbit Works is in Gujarat, Vertex Machinery charges 18% IGST of ₹2,16,000. Total invoice value is ₹14,16,000.

Apex Motors generates the single e-way bill under Case 1:

1. Bill From: Apex Motors, Pune, Maharashtra (GSTIN: 27AAACA1111A1Z1).
2. Dispatch From: Works at MIDC Bhosari, Pune (PIN: 411026).
3. Bill To: Vertex Machinery, Bengaluru, Karnataka (GSTIN: 29AAACB2222B1Z2).
4. Ship To: Orbit Works, GIDC Vatva, Ahmedabad, Gujarat (PIN: 382445).
5. Document: Tax Invoice Number APX-2026-0842 dated 17 October 2026 for ₹11,80,000.

The truck departs Pune carrying a copy of Invoice APX-2026-0842 and the e-way bill. When intercepted by mobile inspection units, the documentation matches the vehicle and consignment completely.

Preventing detention and penalties under Section 129

Roadside transport verification is governed by Section 129 of the CGST Act. If an intercepted vehicle exhibits mismatched documentation, the tax squad issues Form GST MOV-06 to detain the consignment.

Under Section 129(1)(a), the penalty for releasing detained goods where the owner comes forward is 200% of the applicable tax. For our worked example, if an unlinked e-way bill or invalid document leads to detention, the penalty on ₹1,80,000 of tax is an immediate cash demand of ₹3,60,000.

To avoid dispute during highway inspections, follow these operational precautions:

• Ensure the driver carries the exact invoice referenced on the e-way bill portal. If the e-way bill is generated under Case 1, the driver must carry Invoice 1. If generated under Case 2, the driver must carry Invoice 2.
• Verify that the delivery address printed on the accompanying tax invoice explicitly mentions the consignee name and shipping address corresponding to the Ship To field.
• Check that the vehicle registration number is updated in Part B before movement begins. Minor typographic errors limited to one or two characters are eligible for the nominal ₹1,000 penalty under Circular No. 64/38/2018-GST, but a completely blank or unassigned Part B exposes the goods to full Section 129 detention.

Step-by-step portal workflow to generate Bill To Ship To e-way bill

Follow these steps on ewaybillgst.gov.in to generate a Bill To Ship To e-way bill without error:

1. Log in to the official E-Way Bill System Portal.
2. From the left navigation bar, click on e-Waybill and select Generate New.
3. Select Transaction Type as Outward and Sub-Type as Supply.
4. Under Document Type, select Tax Invoice and enter the document number and date.
5. In the Transaction Details section, locate the Transaction Sub-Type dropdown and select Bill To - Ship To.
6. In the Bill From section, the generator GSTIN auto-populates. If dispatching from an alternate warehouse, update the Dispatch From address and PIN code.
7. In the Bill To section, enter the GSTIN of the purchasing party. The trade name and registered address will auto-populate.
8. In the Ship To section, check the box if shipping to a different location, enter the recipient GSTIN or unregistered tag, and type the actual delivery address and PIN code.
9. Enter Item Details including HSN code, product description, taxable value, and applicable tax rates.
10. Complete Part B with the transporter ID, mode of transport, and vehicle registration number, then click Submit.

Related guides

• E-way bill for equipment and machinery moving for site work
• E-way bill validity calculation for over dimensional cargo under Rule 138
• E-way bill blocking for non-filing under Rule 138E
• E-way bill detention under Section 129: bank guarantee and Form GST MOV-08
• E-way bill for goods sent for job work and Form GST ITC-04 reconciliation

Frequently asked questions

Last checked: 17 October 2026. Sources: CBIC CGST Rule 138, CBIC CGST Act Section 16, CBIC CGST Act Section 129, CBIC Press Release dated 23 April 2018, E-Way Bill System Portal.