In some cases where the sale of goods or services does not happen immediately or when payment is not received on supply, delivery challan is issued by the supplier. In this article, we look at the procedure for issuing delivery challan and delivery challan format under GST in detail.
Delivery challan, or dispatch challan, is an instrument that carries details about the delivered goods such as quantity, condition and description. This also contains the recipient details, delivery location and time.
As per Sec 31 of CGST Act 2017 , A registered person supplying taxable goods shall, issue a tax invoice showing the description, quantity and value of goods, the tax charged thereon and such other particulars as may be prescribed – section 31(1) of CGST Act. However in some cases, instead of a tax invoice, a delivery challans is issued for transportation of goods.
As per Rule 55 (1) of CGST Rules, following are instances when delivery challan can be issued for transportation of goods without an invoice:
Supply of liquid gas where the quantity at the time of removal from the place of business of the supplier is not known.
Transportation of goods for job work. – Delivery challan is required for sending goods by Principal to job worker or one job worker to another job worker or return of goods after job work to Principal.
Transportation of goods for reasons other than by way of supply: There are instances when transportation of goods are required even before supply take place .
Goods sent on approval basis Where the goods being sent or taken within the State or outside the State on approval for sale or return basis and are removed before the supply takes place, Delivery Challan should be issued at the time of removal of goods.
Transporting Art Work to various galleries : Artists carry their art works to various galleries where these are exhibited and sold from such galleries, if work is selected by buyer. In such case, the art works from one gallery to another within state or outside state should be transported under delivery challan.
Sending goods outside India for exhibition or for export promotion – CBI&C Circular No. 108/27/2019-GST dated 18.07.2019 has clarified that removal of goods out of India for exhibition or on consignment basis for export promotion is neither ‘supply’ nor ‘export’. Since it is not ‘export’, LUT or bond is not required. Goods should be sent under Delivery Challan.
Transfer of Goods in Multiple Shipments : In case of transfer of goods in multiple shipments, where the goods are being transported in a semi knocked down or completely knocked down condition, the supplier shall issue the complete invoice before dispatch of the first consignment and shall issue a delivery challan for each of the subsequent consignments, giving reference of the invoice.
Tax invoice could not be issued at the time of removal : Where the goods being transported are for the purpose of supply to the recipient but the tax invoice could not be issued at the time of removal of goods for the purpose of supply, the supplier shall issue a tax invoice after delivery of goods – Rule 55(4) of CGST and SGST Rules, 2017.For example delivery challans need to be issue in a situation where tax invoice cannot be issued at the time of removal as weighment is to be done after clearance of goods.
E- Way Bill : where a person is not required to carry an e-way bill under CGST rules – rule 55A of CGST Rules inserted w.e.f. 23-1-2018 and where tax invoice or Bill of Supply is not required, Delivery Challan should accompany the goods.
Delivery challans must be serially numbered not exceeding sixteen characters, in one or multiple series. The following information must be mentioned in all delivery challan formats:
As per Rule 55 (2) of CGST Rules, Delivery challans must be prepared in triplicate as below:
The author is a practising CA based in Delhi and is registered Insolvency Professional. He can be reached at [email protected] , Mob. +91 9953587496.
Disclaimer: The views expressed in this article are strictly personal. The content of this document are solely for informational purpose. It doesn’t constitute professional advice or recommendation. The Author does not accept any liabilities for any loss or damage of any kind arising out of information in this article and for any actions taken in reliance thereon.
(Republished with Amendments. Amendments been made by CA Anita Bhadra)