In today’s business the Bill to – ship transactions are often considered as occurrence. The main benefit of any kind of subsequent sale which is during the movement of goods is however exempted from the tax leads in order to do a proper tax planning’s in the current regime.
The purpose of this article is to make the reader aware of the bill to ship to transaction’s place of supply in GST regime.
However , in the Bill to – Ship to the model, the billing and the shipping of goods are thus however done to the entities and also two states.
Let us however understand this by an example : M/s. Sonu Ltd, is a dealer in automobile goods, which is however located in Tamil Nadu receives an order from however M/s. Monu Ltd , which is located in Gujrat. The order is thus for the supply of 5,000 qty of the automobile part, with an instruction in order to ship this goods to M/s. Natu Ltd (A Customer of M/s.Monu Ltd), which is located in Karnataka.
Here however 2 transactions have taken place :
1. Between Sonu Ltd. and Monu Ltd. : Where Sonu Ltd. is thus the supplier and where Monu Ltd. is thus the buyer. However Accordingly, Sonu Ltd. will thus bill the transaction to Monu Ltd., and also as per the instruction, however ships the goods to Natu Ltd. which is located in Karnataka.
Here , the taxes which are applied are : CST 2 %
The forms which :- Monu Ltd. will fill is C Form and also Sonu Ltd. would fill E-1 Form
Here , the taxes which are applied are : CST 2 %
The forms which :- Monu Ltd. will fill is C Form and also Sonu Ltd. would fill E-1 Form
2. Between Monu Ltd. and Natu Ltd. : Where Monu Ltd. is thus the supplier and thus Natu Ltd. is the buyer. Monu Ltd. however bills the transaction to Natu Ltd., and also endorses the lorry receipt (goods that are shipped in a lorry by Sonu Ltd.) in the favour of Natu Ltd.
Here , nil taxes are paid and the forms which Natu Ltd has to fill is C form and the form which Sonu Ltd has to fill is Lorry Reciept .
Here , nil taxes are paid and the forms which Natu Ltd has to fill is C form and the form which Sonu Ltd has to fill is Lorry Reciept .
However the status of Bill to – Ship to transactions in the Current regime is that there are two transaction which are , a first sale and also a subsequent sale. In the current regime, the tax should thus be levied on both the parts of the transaction.
However, in thus order to avoid the tax being calculated multiple times through the course of the transaction, the exemptions are however provided on the subsequent sales. These exemptions however, are thus subject to the furnishing of the prescribed forms which is thus under CST Act. In order to get the exemption however on the subsequent sale, a declaration Form E1 is thus required to be issued by the first seller, and also a C-Form is required to be issued by the buyer for the levy of CST however at a reduced rate of 2%.
However, in thus order to avoid the tax being calculated multiple times through the course of the transaction, the exemptions are however provided on the subsequent sales. These exemptions however, are thus subject to the furnishing of the prescribed forms which is thus under CST Act. In order to get the exemption however on the subsequent sale, a declaration Form E1 is thus required to be issued by the first seller, and also a C-Form is required to be issued by the buyer for the levy of CST however at a reduced rate of 2%.
However , the Bill to – Ship to transactions in the GST regime is somewhat different .
Under the GST, the place of supply of goods is however important in order to determine the transaction as either an interstate or intrastate and thus accordingly, the applicable taxes can however be levied.
In GST, if the goods are thus however supplied by the supplier to the recipient on the direction of a third person, it will however be deemed that the third person has thus received the goods, and also the place of supply will however be considered as the principal place of business of thus such third person.
Under the GST, the place of supply of goods is however important in order to determine the transaction as either an interstate or intrastate and thus accordingly, the applicable taxes can however be levied.
In GST, if the goods are thus however supplied by the supplier to the recipient on the direction of a third person, it will however be deemed that the third person has thus received the goods, and also the place of supply will however be considered as the principal place of business of thus such third person.
Also , the place of supply for the Bill to – Ship to transactions is however defined under GST under Section 10 (b) of IGST;
(b) where the goods are however delivered by the supplier to a recipient or thus any other person thus on the direction of a third person, whether he is thus either acting as an agent or otherwise, thus before or however during the movement of goods, either by way of the transfer of the documents of title to the goods or however otherwise, it shall thus be deemed that the said third person has however received the goods and also the place of supply of such kind of goods shall thus be the principal place of business of such person;
(b) where the goods are however delivered by the supplier to a recipient or thus any other person thus on the direction of a third person, whether he is thus either acting as an agent or otherwise, thus before or however during the movement of goods, either by way of the transfer of the documents of title to the goods or however otherwise, it shall thus be deemed that the said third person has however received the goods and also the place of supply of such kind of goods shall thus be the principal place of business of such person;
Thus , after however considering the GST provisions, it is thus very important in order to have an accurate determination of the place of supply for the below reasons which are :
• The wrong classification of supply which is however between either interstate or intra-state and also vice-versa may thus lead to hardship to the taxpayer thus as per section 19 of IGST Act and also section 70 of CGST Act.
• The taxpayer will also be required to pay the correct tax along with the interest for the delay which is thus on the basis of the revised/correct classification.
• Also, the correct determination of the place of supply will also help one in knowing the incidence of tax.
• Where the wrong taxes have however been paid on the basis of the wrong classification, refund will also have to be claimed by the taxpayer.
Lastly, it is also very important in order to understand firstly the main purpose of the transaction in the proposed Bill to – Ship to transactions, as it will however define the place of supply under the GST regime and the taxes will also be however applicable accordingly.
• The wrong classification of supply which is however between either interstate or intra-state and also vice-versa may thus lead to hardship to the taxpayer thus as per section 19 of IGST Act and also section 70 of CGST Act.
• The taxpayer will also be required to pay the correct tax along with the interest for the delay which is thus on the basis of the revised/correct classification.
• Also, the correct determination of the place of supply will also help one in knowing the incidence of tax.
• Where the wrong taxes have however been paid on the basis of the wrong classification, refund will also have to be claimed by the taxpayer.
Lastly, it is also very important in order to understand firstly the main purpose of the transaction in the proposed Bill to – Ship to transactions, as it will however define the place of supply under the GST regime and the taxes will also be however applicable accordingly.
Thus , for further queries related to GST , one can contact LegalRaasta .
Legal Raasta , an online web portal which provides more than 100+ legal services has built however an extremely easy-to-use and an intuitive software for GST . However , the founders of LegalRaasta a startup which provides legal services aims at easing the difficulties related to GST by providing many services . Choosing LegalRaasta is beneficial as:
1. It has , 30+ offices in India
2. It has 10+ years experience
3. It helps to save your time
4. There is a cash back guarantee
Some of the services which it provides are :
1. Tax Filing/TDR – GST Registration , GST Return, ITR , TDS Return filing, Business income return , Bulk return filing , Revised return filing , Respond to tax notice
2. Company Formation – Pvt. Ltd., Limited Liability Partnership (LLP) , OPC registration
3. Registrations – DSC, Trademark, Patent , Copyright
It thus also provides many more services .
Legal Raasta , an online web portal which provides more than 100+ legal services has built however an extremely easy-to-use and an intuitive software for GST . However , the founders of LegalRaasta a startup which provides legal services aims at easing the difficulties related to GST by providing many services . Choosing LegalRaasta is beneficial as:
1. It has , 30+ offices in India
2. It has 10+ years experience
3. It helps to save your time
4. There is a cash back guarantee
Some of the services which it provides are :
1. Tax Filing/TDR – GST Registration , GST Return, ITR , TDS Return filing, Business income return , Bulk return filing , Revised return filing , Respond to tax notice
2. Company Formation – Pvt. Ltd., Limited Liability Partnership (LLP) , OPC registration
3. Registrations – DSC, Trademark, Patent , Copyright
It thus also provides many more services .
This article has been contributed by Himanshu Jain, CEO, LegalRaasta, an online portal for Section 8 Company Registration , Nidhi Company Registration, IEC Registration , FSSAI License, Income Tax Return Filing.
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