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Bill to Ship to Model and IGST Credit at what point of chain

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Jayanta Bandyopadhyay

414 Points Posted on 12 February 2022

We, Kolkata based plant, place 2 separate POs on 2 Chennai based parties.

Party A to supply Mandrel . They will deliver it at Party B, who would supply cooler gear box but additionally to perform job work. Party B to assemble mandrel ( supplied by A) and then to send to Kolkata.

As Party A will issue invoice to Kolkara but ship to Chennai Party B along with Igst, can Kolkata plant take igst credit on release of payment to A immediately? Job work and payment to B plus final supply to take 3 more months

Kindly guide.

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Quick Summary

This discussion clarifies IGST credit eligibility for a 'bill to ship to' model. A Kolkata plant orders parts from Party A (Chennai) and job work from Party B (Chennai). Party A invoices Kolkata but ships to Party B for assembly before final delivery to Kolkata. The consensus is that the Kolkata plant can claim IGST credit under Section 19(5) upon payment to Party A, provided the 'bill to ship to' model is correctly invoiced, with a 12-month window for material return.