Issue in billing of Warehouse bill to and ship to

This query is : Resolved

Pradeep Sharma (Querist)
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06 July 2021 Dear Sir
We purchase a material from Mumbai and direct supplied to Tamilnadu but now tamilnadu vendor refused to make the payment in this month. He gives the payment in next month.

Now decided we will purchase the material from Mumbai party and take a warehouse on rent in Mumbai to store material after that when Tamilnadu vendor will done the payment we release the materiel to him.

We can not understand how to make billing process for this, please help

CA Altamush Zafar

CA Altamush Zafar (Expert)
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06 July 2021 In which state are you registered?

Deepa B

Deepa B (Expert)
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07 July 2021 If terms agreed with your customer is such that your sale transaction materializes only on receipt of payment from them. Then you can follow below process.
Record purchase entry when goods are bought from the supplier in Mumbai. Then raise and share sales invoice instantly on the day when your customer in Tamil Nadu consents to release the payment because without invoice no customer would agree to pay. Besides to comply with e-invoice or e-way bill provisions of GST, invoice document is a pre-requisite without which dispatch of goods to customer location will not be possible.

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Pradeep Sharma

Pradeep Sharma (Querist)
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07 July 2021 Sir We registered in Delhi

We can not understand the billing process for Mumbai office to Mumbai warehouse and next month Mumbai warehouse to Tamilnadu.

is this bill to ship to process or any things else.

Asha Kanta Sharma online

Asha Kanta Sharma

(Expert)
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02 August 2024 In your situation, where you are purchasing material from a supplier in Mumbai, storing it in a Mumbai warehouse, and then delivering it to a vendor in Tamil Nadu, you need to carefully manage the billing and GST implications. Here’s a breakdown of the process and how to handle the billing:

### **1. Billing Process**

**a. Purchase from Mumbai Supplier:**
- **Billing from Supplier:** The Mumbai supplier will issue an invoice to your company (registered in Delhi) for the sale of the material. This invoice should include GST as applicable.

**Example Invoice Details:**
- **Seller:** Mumbai Supplier
- **Buyer:** Your Company (Delhi)
- **Delivery Address:** Mumbai Warehouse
- **Description:** Material purchased
- **GST:** Applicable GST on the purchase

**b. Storage in Mumbai Warehouse:**
- The warehouse itself does not require separate billing, but you need to ensure proper documentation for GST and inventory management. Ensure the Mumbai warehouse has the necessary records of the stored material.

**c. Supply to Tamil Nadu Vendor:**
- When the Tamil Nadu vendor is ready to make the payment and receive the material, you will need to issue a fresh invoice for the delivery of the material from the Mumbai warehouse to the Tamil Nadu vendor.

**Example Invoice Details:**
- **Seller:** Your Company (Delhi)
- **Buyer:** Tamil Nadu Vendor
- **Delivery Address:** Tamil Nadu Vendor’s Address
- **Dispatch Address:** Mumbai Warehouse
- **Description:** Material supplied
- **GST:** As applicable for inter-state supply

### **2. GST Implications**

**a. GST on Purchase from Supplier:**
- The purchase of material from the Mumbai supplier is an intra-state transaction for them, so GST should be charged by the supplier. This GST can be claimed as input tax credit by your company, assuming you are eligible.

**b. GST on Supply to Tamil Nadu Vendor:**
- Since you are supplying material from Mumbai to Tamil Nadu, this is an inter-state supply and will attract IGST (Integrated Goods and Services Tax) at the applicable rate.
- The invoice should include IGST and not SGST/UTGST.

### **3. Billing Considerations**

**a. Invoice from Mumbai Supplier to Your Company:**
- This invoice should reflect the details of the transaction including GST. The supplier will charge GST on the sale, which you will account for as input tax credit.

**b. Invoice from Your Company to Tamil Nadu Vendor:**
- This invoice should reflect IGST on the supply. Ensure the invoice has all required details including GSTINs of both parties, place of supply, and HSN/SAC codes.

### **4. Documentation and Compliance**

1. **Maintain Proper Records:**
- Keep detailed records of all transactions including purchase invoices, warehouse receipts, and supply invoices.

2. **Warehouse Agreement:**
- Ensure there is a formal agreement for the storage of material in the Mumbai warehouse, outlining terms and conditions.

3. **GST Returns:**
- Report the input tax credit from the Mumbai supplier's invoice in your GST returns.
- Report the IGST collected on the supply to Tamil Nadu in your GST returns.

4. **Tax Credit Utilization:**
- Utilize the input tax credit from the purchase of material against the IGST liability on the supply to Tamil Nadu.

### **5. Billing Example**

- **Initial Purchase Invoice:**
- From Mumbai Supplier:
- **Invoice No:** 001
- **Date:** [Date]
- **Amount:** ₹1,00,000
- **GST (e.g., 18%):** ₹18,000
- **Total:** ₹1,18,000
- **Destination:** Mumbai Warehouse

- **Supply Invoice:**
- From Your Company to Tamil Nadu Vendor:
- **Invoice No:** 002
- **Date:** [Date]
- **Amount:** ₹1,00,000
- **IGST (e.g., 18%):** ₹18,000
- **Total:** ₹1,18,000
- **Dispatch Address:** Mumbai Warehouse
- **Delivery Address:** Tamil Nadu Vendor’s Address

### **Conclusion**

In summary, the billing process involves issuing an invoice for the initial purchase from the Mumbai supplier, storing the material in the warehouse, and then issuing a separate invoice for the inter-state supply to the Tamil Nadu vendor. Ensure compliance with GST regulations, proper documentation, and accurate reporting in GST returns.