Delivery challan format: the document for goods that move without a sale
A delivery challan is the paperwork for goods that leave your premises without being sold at that moment — sent to a job worker, given to a customer on approval, or moved between premises under the same GSTIN. Rule 55 of the CGST Rules makes it mandatory for those movements and lists what it has to contain. It is not a tax invoice and not a substitute for one: the moment the goods are actually supplied, a tax invoice is required, and a challan issued in its place is a Section 31 violation. What the challan does is establish, at a check post or in an audit, who sent what to whom and why — which is the same question an e-way bill answers about the vehicle. The two documents do different jobs, and they usually travel together.
Frequently asked questions
What is a delivery challan?
A delivery challan is the document that travels with goods moved for a reason other than a sale — sent to a job worker, given to a customer on approval, or moved between premises under the same registration. Rule 55 of the CGST Rules makes it mandatory for those movements. It records what is moving, in what quantity and at what value, and on whose behalf, but it does not charge tax and it does not transfer ownership. The sale, when it happens, is billed separately on a tax invoice.
When do I need a delivery challan instead of a tax invoice?
When the movement is not a supply. The three common cases are goods sent to a job worker for processing, goods sent to a customer on approval where the sale has not yet happened, and goods moved between premises covered by the same GSTIN. Rule 55 covers job work and "any other purpose other than by way of supply". The moment the goods are actually supplied, a tax invoice is required, and a challan issued in its place is a violation of Section 31.
What must a delivery challan contain?
Rule 55(1) lists the contents: the challan number and date, the name, address and GSTIN of the consignor, and of the consignee where registered, the HSN code, a description of the goods, the quantity with its unit of measure, the taxable value and the tax amount where applicable, the place of supply, and a signature. For job work the challan should also carry a declaration that the goods are being sent for job work, which is what distinguishes it from a dispatch that should have been invoiced.
Does a delivery challan replace the need for an e-way bill?
No. They answer different questions and usually travel together. The challan explains why the goods are moving; the e-way bill records the vehicle, the route and the validity of that movement. An e-way bill is required where the consignment value is above ₹50,000 for inter-state movement, or above the state threshold inside the state, whatever document the goods are moving under. The value declared on the challan is the consignment value you enter on the e-way bill.
Is GST charged on a delivery challan?
Usually not. A challan for job work or approval states a movement that is not a supply, so there is no tax to charge and the rate starts at zero in this template. A stock transfer between two different GSTINs of the same business is treated as a supply under Schedule I, so that movement is invoiced rather than challaned; a transfer between premises under one GSTIN is not a supply and does move on a challan. Where your accounting needs the tax shown for the recipient branch, enter the rate in Excel and the columns recalculate.
Can I use a delivery challan as an invoice?
No. A challan can accompany goods to a customer on approval, but if the customer keeps them the supply has happened and a tax invoice under Section 31 is required — within 30 days of removal for an approval sale. Issuing only a challan for a completed sale leaves the buyer without a valid tax document, which means they cannot claim input tax credit, and it leaves you with an unexplained dispatch in your returns.
What is the difference between a delivery challan and a tax invoice?
A tax invoice is a demand for payment: it charges tax, transfers title, supports input tax credit and is what you report in GSTR-1. A delivery challan identifies a movement that is not a sale: no tax, no transfer of title, no credit, and it does not appear as a supply in your returns. The two are not interchangeable, and the confusion usually shows up as goods that left the premises with no invoice ever raised against them.
Do I need a challan when goods come back from a job worker?
Yes. The return is also a movement that is not a supply, so it travels on a challan — this time issued by the job worker, quoting the original challan number. Linking the two is what makes the chain auditable and what supports the ITC-04 reconciliation. Without the reference the return looks like a fresh dispatch from the job worker, and the original removal never appears to have come back.