E-Way Bill for Bill-To Ship-To and Dropship Transactions in India

A distributor in Bengaluru orders 400 pumps from a manufacturer in Bhiwandi and asks for them to go straight to a project site in Hosur. The manufacturer's dispatch desk raises its e-way bill, the distributor's purchase team raises another one "to be safe", and three days later the truck is stopped with two documents that name different destinations for the same goods. Nobody broke the law on purpose; the two teams simply never agreed who owned the movement.

Bill-to ship-to and dropship flows are routine, and the rules for them are short. One movement needs one e-way bill. Either the party that ordered the goods or the party that dispatches them can generate it, and each choice fixes which invoice, which GSTINs and which state codes go into Part A. Get those four fields right and the consignment clears every check without a call to the tax desk.

• What this guide covers: the three-party structure, which GSTIN generates the e-way bill, place of supply on each invoice, transaction type codes, the e-invoice path for suppliers who must use the IRN, and the Ship-to GSTIN change that GSTN proposed and then paused.
• What you can reuse: a field map for both generation cases, a worked consignment in rupees, a sample API payload and an ERP readiness checklist.

Three parties, two invoices and a single movement of goods

A bill-to ship-to sale involves two supplies but only one physical movement, so it needs two tax invoices and one e-way bill. The Ministry of Finance said exactly that in a press clarification dated 23 April 2018, after traders asked whether each invoice needed its own e-way bill under the CGST Rules, 2017.

The clarification labels the parties in a way worth keeping, because ERP sales and purchase orders rarely use the same names for them. A is the person who orders B to send goods directly to C. B is the person who sends the goods to C on behalf of A. C is the recipient. B invoices A, which the ministry calls Invoice-1, and A invoices C, which it calls Invoice-2.

• Party A, the buyer-seller: holds the customer relationship with C and buys from B; it never physically handles the goods.
• Party B, the dispatching supplier: loads the truck from its own principal or additional place of business.
• Party C, the consignee: receives the goods and is billed by A, not by B.
• One movement: B's premises to C's premises, which is the only journey the e-way bill describes.

E-way bill rules for bill-to ship-to supplies under CGST Rule 138 allow either the ordering party A or the dispatching supplier B to generate the e-way bill, but the Finance Ministry's 23 April 2018 clarification requires only one e-way bill for the movement, whatever the consignment value above the ₹50,000 threshold in Rule 138(1).

Rule 138(1) itself applies to every registered person who causes movement of goods with a consignment value above ₹50,000, and its Explanation 2 counts that value from the invoice including central, state or integrated tax and cess. In a bill-to ship-to case the value therefore depends on which invoice the generating party uses, which is the first practical consequence of choosing who generates.

Which GSTIN generates the e-way bill and which invoice it cites

Whoever generates the e-way bill cites its own invoice and appears as Bill From. If B generates, Part A carries Invoice-1 and names A as Bill To; if A generates, Part A carries Invoice-2 and names C as Bill To. In both cases Dispatch From is B's premises and Ship To is C's address.

The table follows the ministry's two cases field for field. The last row is the one most sites skip: the purchase order or supply agreement should state which party generates, so that the other side knows not to. A one-line clause, "e-way bill to be generated by supplier against its invoice", removes the duplicate described in the opening paragraph.

Place of supply on each invoice under IGST section 10(1)

The two invoices in a bill-to ship-to chain take their place of supply from different clauses, so one can be inter-state while the other is intra-state. Invoice-1 follows section 10(1)(b) of the IGST Act; Invoice-2 follows section 10(1)(a). Getting this wrong charges the wrong tax type, which the e-way bill then repeats.

• Invoice-1, B to A: under section 10(1)(b), where goods are delivered to a recipient or any other person on the direction of a third person, that third person, A, is deemed to have received them, and the place of supply is A's principal place of business.
• Invoice-2, A to C: under section 10(1)(a), where the supply involves movement of goods, the place of supply is where the movement terminates for delivery, which is C's location.
• Consequence for B: if B and A are registered in the same state, Invoice-1 carries CGST and SGST even though the truck leaves the state.
• Consequence for A: A charges IGST on Invoice-2 whenever C's delivery state differs from A's own registration state.

Place of supply on the supplier's invoice in a bill-to ship-to sale follows IGST Act section 10(1)(b): the ordering party is deemed to receive the goods at its principal place of business. A Mumbai supplier billing a Mumbai buyer for goods trucked 1,050 km to Tamil Nadu therefore charges CGST and SGST, not IGST.

A worked consignment in rupees, with a dollar view for a US parent

The e-way bill's value and tax fields change with the generating party, because each case cites a different invoice. The worked example uses B in Bhiwandi, Maharashtra (state code 27), A in Bengaluru, Karnataka (29) and C in Hosur, Tamil Nadu (33), with an illustrative 18% GST rate; confirm the actual rate for the HSN, since many rates changed from 22 September 2025.

The e-way bill is an India-only control with no US equivalent, so the dollar column below is not a second market. It is the translation a US-parented group would see in its consolidation, at an illustrative ₹88 per US dollar, and shows why the generating party's invoice, not the end sale, drives the declared value.

Validity comes from Rule 138(10): one day for the first 200 km and one more day for each further 200 km or part of it, so 1,050 km gives six days, each ending at midnight of the following day. The figure is the same in every case because validity follows distance, not the invoice. The illustrative 1,050 km should itself be checked against the portal's PIN-to-PIN distance before dispatch.

Transaction type codes and the state fields in the payload

The e-way bill system records the bill-to ship-to structure in one field, transactionType, and two pairs of state codes. In the NIC API version 1.03, transactionType takes 1 for Regular, 2 for Bill To-Ship To, 3 for Bill From-Dispatch From and 4 for the combination of 2 and 3.

• toStateCode: the state of supply on the cited invoice, which is the bill-to party's state for Invoice-1.
• actToStateCode: the actual delivery state; the API validates the ship-to PIN code against this state.
• fromStateCode and actFromStateCode: the billing state and the actual dispatch state, which differ when goods leave a premises other than the billing address.
• transDistance: entered in kilometres; NIC rejects a figure more than 10% away from its stored PIN-to-PIN distance, and passing 0 lets the system fill in its own figure.

Dropship flows map onto the same codes. When a marketplace seller or trading company bills its customer but the goods leave a vendor's warehouse, the seller's view is Bill From-Dispatch From, type 3. When the seller also ships to someone other than the bill-to party, both differences apply and the transaction is type 4. Case 2 above, where A generates, is a type 3 document from A's side.

{
  "supplyType": "O",
  "subSupplyType": "1",
  "docType": "INV",
  "docNo": "BW/2611/0457",
  "docDate": "03/11/2026",
  "fromGstin": "27AAACB0000B1Z5",
  "fromStateCode": 27,
  "actFromStateCode": 27,
  "fromPincode": 421302,
  "toGstin": "29AAACA0000A1Z3",
  "toStateCode": 29,
  "actToStateCode": 33,
  "toPincode": 635109,
  "transactionType": 2,
  "totalValue": 600000.00,
  "igstValue": 108000.00,
  "totInvValue": 708000.00,
  "transMode": "1",
  "transDistance": "0",
  "vehicleNo": "MH04AB1234"
}
// Case 1 shape, illustrative values and placeholder GSTINs.
// toGstin = A (bill-to); toPincode = C's site; transactionType 2 = Bill To-Ship To.
// totInvValue must be >= sum of value and tax fields, within the Rs 2 grace NIC allows.

Two details in the payload cause most rejections. The ship-to PIN code must belong to the state in actToStateCode, not toStateCode, and the invoice total must be at least the sum of taxable value, tax and other charges within the ₹2 grace NIC allows. Our e-way bill API integration guide covers authentication and error routing for the same calls.

When the supplier e-invoices, the IRN decides the e-way bill

A supplier that must issue e-invoices cannot raise a standalone e-way bill through the API for a B2B tax invoice. The NIC e-way bill API documentation states that, for e-invoice-enabled suppliers, such documents dated on or after 1 October 2020 must get their e-way bill along with the IRN or by reference to it in the e-invoice system.

E-invoicing applies to registered persons whose aggregate turnover in any year from 2017-18 has exceeded ₹5 crore, the threshold set from 1 August 2023 by Notification 10/2023-Central Tax, subject to the notified exemptions. For a bill-to ship-to sale by such a supplier, the e-invoice payload itself must describe the three-party structure, because the e-way bill inherits it.

• BuyerDtls: carries A's GSTIN and the Pos field, which is A's state code under section 10(1)(b).
• ShipDtls: carries C's legal name, address, PIN and state code; its Gstin field is optional today and accepts a GSTIN or the value URP.
• DispDtls: carries the dispatching premises when the goods leave somewhere other than the seller's billing address.
• EwbDtls: carries transporter ID, mode, distance and vehicle number, so the e-way bill can be created in the same call.

E-invoice IRN payloads for bill-to ship-to supplies must carry ShipDtls with the consignee's PIN and state code, because the NIC e-way bill generated from the IRN takes its delivery details from that block. Suppliers above the ₹5 crore e-invoicing threshold cannot bypass the IRN for B2B tax invoices dated from 1 October 2020.

For the field-by-field mechanics of turning an IRN into Part A, see our guide to e-invoice IRN and e-way bill generation. The point here is narrower: in a bill-to ship-to sale, the e-invoice is where ship-to must be captured, and a blank ShipDtls block cannot be repaired later on the e-way bill side.

The Ship-to GSTIN mandate GSTN proposed and then put on hold

GSTN planned to make the ship-to party's GSTIN a mandatory e-way bill field for bill-to ship-to movements during 2026, then paused the change before it went live. As of the hold advisory dated 29 July 2026, no production change is required, and systems should keep working as they did before.

1. 20 May 2026, advisory issued: GSTN announced e-way bill enhancements, including mandatory capture of Ship-to GSTIN for bill-to ship-to transactions and a voluntary e-way bill closure facility, for production deployment by 15 June 2026.
2. 9 and 17 June 2026, deferral and API detail: later advisories moved implementation to 1 August 2026 and set out e-invoice and e-way-bill-by-IRN API changes in the sandbox.
3. 2 July 2026, FAQs: GSTN published FAQs on the enhancements.
4. 29 July 2026, hold: GSTN kept the enhancements on hold until further notice, told stakeholders that no production changes were required, and said the related advisories and FAQs would be withdrawn from the GST portal.

Even without the mandate, capturing C's GSTIN on the sales order costs little and helps A reconcile output tax on Invoice-2 against delivery records. Treat it as good master data now rather than as a field you will be forced to backfill if the change returns at short notice.

A border check traced back to one missing ship-to block

Most bill-to ship-to interceptions trace back to a delivery address that never reached the document the officer reads. The trace below follows the Bhiwandi to Hosur consignment when the ship-to party existed on A's purchase order but not in B's e-invoice.

1. 3 Nov, 10:05, IRN raised: B's billing clerk posts invoice BW/2611/0457 to A. The ERP sends BuyerDtls with Pos 29 and EwbDtls with transporter and vehicle, but no ShipDtls, because the sales order's ship-to field was left on A's default address. The IRN returns e-way bill 4518 2209 7731 with a Bengaluru PIN.
2. 3 Nov, 10:40, second document: A's purchase team, unaware, raises e-way bill 4518 2210 0185 on Invoice-2 showing Hosur. The portal accepts it because it cites a different document number.
3. 5 Nov, 17:40, interception: an officer stops truck MH04AB1234 heading for Hosur. One document says the goods are bound for Bengaluru; the other names a different invoice and value. The officer records a statement, and release now runs through the Section 129 procedure.
4. 7 Nov, 12:00, resolution: A's e-way bill can no longer be cancelled, because Rule 138(9) allows cancellation only within 24 hours of generation, so B's tax lead files the explanation with the sales order showing Hosur. The truck loses two days of its six-day validity.
5. Control added: B's ERP now refuses to call the IRN API with EwbDtls when the sales order's ship-to party differs from the sold-to party and ShipDtls is empty, and every purchase order states which party generates.

The detention procedure, penalty arithmetic and release options are explained in our article on the Section 129 e-way bill penalty. The cheaper fix is upstream: a sales order that carries the true ship-to party, and a purchase term that names one generator.

Portal validations versus judgement calls left to the tax desk

The NIC system enforces a handful of hard validations, and your ERP can add more, but the commercial question of who generates, and how to read an unclear order, still needs a person. The table names the actual tasks so that each one has an owner.

ERP readiness checklist for bill-to ship-to dispatches

A site is ready for bill-to ship-to volume when the sales order, the e-invoice payload and the dispatch screen agree on the same three parties without manual retyping. The checklist below is the evidence to collect before go-live or before an audit, whichever comes first.

For related shipping and tax document guides, browse the Logistics and Supply Chain hub. If you are mapping bill-to ship-to and dropship flows across an ERP, an e-invoice provider and a transport system and want the field map reviewed, you can share your requirements with us.