In the modern era of global fulfilment and digital commerce, businesses frequently encounter transactions where the billing address and shipping address differ—raising nuanced questions under GST law.
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Can a transaction be considered an export if goods are physically shipped overseas but billed to a domestic customer?
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In B2C e-commerce sales, which address—billing or shipping—determines the place of supply?
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What are the implications for tax liability, zero-rating eligibility, and GSTR-1 reporting?
This guide unpacks two such high-frequency scenarios, integrating statutory provisions, recent CBIC clarifications, and practical compliance insights.
Scenario 1: Invoice Raised to Indian Customer, Goods Shipped Abroad – Export or Domestic Supply?
Business Case
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Billing Address: Gujarat (India)
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Shipping Address: USA
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Nature: Domestic entity places the order; goods are delivered directly to an overseas location
Commonly referred to as the “Bill to India, Ship to Outside India” model, this arrangement is widely used in custom fulfilment, drop shipping, and cross-border execution by Indian vendors.
Legal Interpretation under GST
1. Definition of Export – Section 2(5), IGST Act
A supply of goods qualifies as export only when:
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The goods are taken out of India to a place outside India; and
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The recipient of the supply is located outside India
In this case:
Although the goods physically move abroad, the contractual recipient is based in India. Hence, the export condition is not met.
2. Recipient Determination – Section 2(93), CGST Act
The recipient is defined as the person:
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Liable to pay the consideration for the supply, or
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Receiving the goods or services
Since the Indian entity is the party liable to pay, GST treats this as a domestic supply, regardless of where the goods are delivered.
3. GST Applicability
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This is a taxable domestic inter-State supply
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The supplier is required to charge IGST, not treat it as export
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No LUT/IGST refund benefit is available under Section 16 of the IGST Act
4. Ineligible for Zero-Rated Supply or LUT
Zero-rated supply under GST applies only to:
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Export of goods/services (to a foreign recipient)
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Supplies to SEZ developers or units
As the recipient is Indian, this supply cannot be covered under LUT or zero-rated claims.
Judicial Support
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Sterlite Technologies Ltd. – Gujarat AAR
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Mohan Breweries & Distilleries Ltd. – Tamil Nadu AAR
Both ruled that such supplies do not qualify as exports, as the recipient is situated within India.
Scenario 2: B2C Website Sales with Split Billing & Shipping Addresses
Business Case
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Customer Type: Individual buyer (unregistered under GST)
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Billing Address: Delhi
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Shipping Address: Maharashtra
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Platform: Seller’s own e-commerce website
This is a direct-to-consumer (D2C) model where orders are fulfilled pan-India through a central warehouse or third-party logistics network.
Legal Position under GST
1. Place of Supply for Goods – Section 10(1)(a), IGST Act
Where a supply involves movement of goods, the place of supply is:
“The location where the movement of goods terminates for delivery to the recipient”
💡 Thus, shipping address governs the place of supply, even if the billing address is different.
2. CBIC Circular No. 209/3/2024-GST (Dated 10.06.2024)
This important clarification states:
In B2C transactions through websites or e-commerce platforms, GST is to be charged based on the delivery address, not the billing address.
This ensures:
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Accurate tax classification (CGST/SGST or IGST)
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Correct state-wise GSTR-1 disclosures under Table 5 (Inter-State B2C)
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Consistency across invoice, E-Way Bill, and e-Invoice
Illustrative Matrix of Billing vs Shipping Address on GST
| Billing Address | Shipping Address | Customer Type | GST Applied | Place of Supply | GSTR Treatment |
|---|---|---|---|---|---|
| Gujarat | USA | Registered | ✅ IGST | Not export – domestic recipient | Inter-State Supply |
| Delhi | Maharashtra | Unregistered | ✅ IGST | Shipping address | Table 5 – B2C |
| Maharashtra | Maharashtra | Unregistered | ✅ CGST+SGST | Same state | Table 7 – B2C |
| USA | Gujarat | Foreign Buyer | ✅ IGST | Import into India | Reverse Charge (by recipient) |
FAQs – Clarifying Practical Doubts
Q1. Can “Bill to India, Ship to Abroad” be treated as export?
🔺 No – If the contractual recipient is in India, the transaction fails to meet the legal test of export.
Q2. Can LUT or refund of IGST be claimed in such cases?
❌ No – These benefits are reserved strictly for zero-rated exports or SEZ supplies, with recipient outside India.
Q3. In website-based B2C sales, which address matters for GST?
✅ The shipping address determines place of supply, even if the billing address is in another state.
Q4. What if the billing and shipping address belong to the same person?
✅ The law still focuses on the place of delivery, as per Section 10(1)(a).
Q5. Are e-commerce operators (like Flipkart/Amazon) liable in such transactions?
Only in Section 9(5) notified cases (e.g., passenger transport, accommodation). Otherwise, the seller bears GST responsibility.
Checklist – GST Treatment for Split Billing & Shipping
| Compliance Area | Required Action |
|---|---|
| Invoice Format | Include both billing and shipping addresses |
| POS Determination | Match with shipping location under Sec. 10(1)(a) |
| GSTR-1 Reporting | Use Table 5 for inter-State B2C supplies |
| E-Way Bill | Align place of supply and shipping destination |
| E-Invoice | Validate POS and customer details |
| LUT Usage | Allowed only when recipient is outside India |
Misconceptions Clarified
❌ "Goods are going out of India, so it must be an export."
→ False. Export requires foreign recipient and foreign payment.
❌ "I can choose billing or shipping for GST purposes."
→ False. Shipping address = Place of Supply where goods move.
❌ "ISD rules apply to such cases."
→ Incorrect. Input Service Distributor (ISD) applies only to input services, not to billing-shipping decisions.
Conclusion: Matching Commercial Substance with Legal Form
GST is a destination-based tax, but the “destination” under law refers to the contractual and physical place of delivery, not just cross-border movement. Misaligning contracts, invoicing, and reporting can lead to:
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Incorrect tax charged (CGST/SGST vs IGST)
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Disallowed refunds or misclassified exports
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Return mismatches, audits, and penalties
Businesses must adopt a legally robust and system-validated GST framework to address such commercial complexities.
