How to Create a Delivery Challan Under GST
A delivery challan is a document used to transport goods without issuing a tax invoice. Under GST, it plays a critical role in specific scenarios where an invoice is not required at the time of movement. Understanding when and how to use it ensures compliance during transit and audits.
When Is a Delivery Challan Required?
A delivery challan is issued instead of a tax invoice in the following scenarios:
- Supply of liquid gas: Where the quantity is not known at the time of removal
- Job work: Sending goods to a job worker for processing
- Goods sent on approval: Where the sale is not confirmed at the time of dispatch
- Branch transfers: Moving goods between branches of the same entity
- Semi-knocked-down (SKD) or completely-knocked-down (CKD) goods: Shipped in multiple consignments
Mandatory Fields in a Delivery Challan
Under Rule 55 of the CGST Rules, a delivery challan must contain:
- Date and number of the delivery challan
- Name, address, and GSTIN of the consigner
- Name, address, and GSTIN of the consignee
- HSN code, description, and quantity of goods
- Taxable value, tax rate, and tax amount (CGST, SGST, or IGST)
- Place of supply
- Signature
Delivery Challan vs Tax Invoice
| Parameter | Delivery Challan | Tax Invoice |
|---|---|---|
| Purpose | Goods transport without sale | Billing for goods or services supplied |
| When issued | Before or at time of transport | At time of supply |
| Tax liability | No immediate tax liability (in most cases) | Creates tax liability |
| ITC claim | Not directly | Yes, by the buyer |
| E-way bill | Required if value exceeds ₹50,000 | Required if value exceeds ₹50,000 |
E-Way Bill Requirements
A delivery challan must be accompanied by an e-way bill if the consignment value exceeds ₹50,000. The e-way bill can be generated using the delivery challan number as the document reference. Both documents must travel with the goods during transit.
Delivery Challan for Job Work
Job work is one of the most common use cases for delivery challans. When you send raw materials or semi-finished goods to a job worker, you issue a challan instead of an invoice. The goods must be returned or supplied from the job worker within:
- 1 year for inputs
- 3 years for capital goods
If goods are not returned within these periods, the principal must issue an invoice and pay GST as if it were a supply.
Numbering and Record-Keeping
Delivery challans must be serially numbered and maintained in a separate series from tax invoices. Keep copies of all challans along with corresponding e-way bills. When goods sent on a challan are eventually sold, the tax invoice must reference the original challan number.
Creating Delivery Challans with FileWithUs.ai
FileWithUs.ai supports delivery challan creation with all GST-mandatory fields pre-configured. You can create challans for job work, branch transfers, or goods on approval. The platform maintains a separate numbering series, links challans to eventual invoices, and stores all documents for easy retrieval during audits. Generate professional PDF challans and share them with transporters and consignees in one click.
Delivery challans are a compliance necessity for businesses that move goods frequently. Get the format right, maintain proper records, and always generate an e-way bill when required. This keeps your goods moving and your compliance intact.
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