A delivery challan travels with goods when they are being moved but an invoice cannot or should not be issued yet. It is common in job work, goods sent on approval and deliveries billed later.
When can a delivery challan be used?
Rule 55 of the CGST Rules allows a delivery challan, instead of a tax invoice, when goods are transported for:
- Job work (sending goods to a job worker for processing).
- Supply on approval, where the buyer may return the goods.
- Supply of liquid gas where the quantity is not known at the time of removal.
- Other reasons where the movement is not a supply, for example moving your own stock between your places of business.
Once the goods are accepted or sold, the supplier issues the tax invoice.
What a delivery challan must contain
- Date and a consecutive serial number of not more than 16 characters.
- Name, address and GSTIN of the consignor (sender).
- Name, address and GSTIN (if registered) of the consignee (receiver).
- HSN code and description of the goods.
- Quantity (provisional where it is not known at the time of removal).
- Taxable value, tax rate and tax amount, where the movement is a supply to the consignee.
- Place of supply with state, for inter-state movement.
- Signature of the consignor.
Prepare it in three copies: the original for the consignee, the duplicate for the transporter and the triplicate for the consignor.
Delivery challan and the e-way bill
A challan does not remove the need for an e-way bill. Under Rule 138, an e-way bill is generally required for moving goods with a consignment value above ₹50,000, with state-specific variations for movement within a state. The e-way bill is generated on the e-way bill portal; Rashtra Bill does not generate it, but you can print the challan to travel with the goods.
Delivery challans in Rashtra Bill
Create a challan with the customer, items, HSN codes and quantities, then print it or save the PDF to travel with the goods. When the goods are sold, raise the tax invoice for the same customer and items.
Frequently asked questions
Is a delivery challan a tax document?
It is a transport document that can replace an invoice only in the cases Rule 55 allows. When the goods are actually sold, a tax invoice must still be issued.
Do I need a GSTIN to issue a challan?
If you are registered under GST, the challan carries your GSTIN. Check with your CA for cases involving unregistered persons.
This guide is general information for small businesses, not legal or tax advice. GST rules, rates and thresholds are changed by notification, so check the current position on the GST portal or with your chartered accountant before acting.