GST and invoicing
What is a delivery challan? GST rules, format, example
Definition
Delivery challan: A delivery challan is a document that travels with goods to record what was sent, used under GST when goods move without a tax invoice, such as for job work.
Also called: DC, Challan, Dispatch challan, Delivery note, Delivery challan format
When a delivery challan is used
A delivery challan lists the goods being moved: what, how many, from whom and to whom. Rule 55 of the CGST Rules allows a challan in place of a tax invoice only in certain cases:
- Goods sent for job work, such as fabric sent to a stitching unit.
- Goods moved for reasons other than a sale, such as stock sent to your own godown in the same state or to an exhibition.
- Liquid gas, when the exact quantity is not known as it leaves.
Delivery challans for sales sent in parts
For an ordinary sale where goods move, section 31 of the CGST Act requires the tax invoice before or at the time the goods leave, so a challan alone is not enough. When one sale goes in batches or lots, Rule 55(5) says: issue the complete invoice before the first lot, send each later lot with a delivery challan that refers to the invoice and a certified copy of the invoice, and send the original invoice with the last lot.
What a GST delivery challan must show
Rule 55 lists the details:
- Challan number, up to 16 characters, and date.
- Name, address and GSTIN of the sender (consignor) and the receiver (consignee), where registered.
- HSN code, description and quantity of the goods.
- Taxable value, plus the tax rate and amount when the goods are going to the consignee as a supply.
- Place of supply for inter-state movement, and a signature.
Copies and common mistakes
Make it in triplicate: Original for consignee, Duplicate for transporter and Triplicate for consignor. If the consignment needs an e-way bill, generate it against the challan. Common mistakes are sending sold goods on a challan and invoicing at the end of the month, leaving challans unnumbered, and not tracking what comes back from job work.
Worked example
One sale sent in two lots
A Tiruppur garment maker sells 600 T-shirts to a retailer in Bengaluru, but only 400 are packed by Monday. It issues one tax invoice for all 600 before Monday's dispatch. The 400 travel with a delivery challan quoting the invoice number and a certified copy of the invoice. On Friday, the last 200 go with a second challan and the original invoice. Each challan shows 600 ordered, what has been sent so far and what is still pending.
In managemate
In managemate, a delivery challan prints from any sales order once something has been delivered. It shows the order number, the invoice number once issued, place of supply, the customer and the ship-to address, each item with its HSN code, and ordered, delivered and pending quantities with a tick box for checking. It has blank lines for transporter, vehicle number, LR or docket number and e-way bill number, and for Prepared by, Delivered by and the receiver's signature and stamp. It is a dispatch note for sales: it carries the order number rather than its own challan number and shows no values or tax, and managemate does not print challans for job work or for stock transfers between your locations. You can issue the order's invoice as soon as the first delivery is recorded, so the tax invoice can go with the goods.
Where this shows up in managemate
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