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.

Instances when delivery challan under GST can be issued for transportation of goods without an invoice

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 .

Following are the cases , where , delivery challan need to be issued for transportation of goods ;

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 Challan Format under GST-

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:

  • Date and number of the delivery challan.
  • Name, address and GSTIN of the consigner, if registered.
  • Name, address and GSTIN or Unique Identity Number of the consignee, if registered. If unregistered, name, address and place of supply.
  • HSN code for the goods.
  • Description of goods.
  • Quantity of goods supplied (provisional, where the exact quantity being supplied is not known).
  • Taxable value of supply.
  • GST tax rate and tax amount broken down as CGST, SGST, IGST and GST Cess – where the transportation is for supply to the consignee.
  • Place of supply, in case of inter-state movement of goods.
  • Signature.

Procedure for Issuing Delivery Challan under GST-

As per Rule 55 (2) of CGST Rules, Delivery challans must be prepared in triplicate as below:

  • The original copy must be marked as ORIGINAL FOR CONSIGNEE.
  • The duplicate copy must be marked as DUPLICATE FOR TRANSPORTER.
  • The triplicate copy must be marked as TRIPLICATE FOR CONSIGNER.

The author is a practising CA based in Delhi and is registered Insolvency Professional. He can be reached at cavinodchaurasia@gmail.com , 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)

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24 Comments

  1. YUVARAJ SEKAR says:

    Hi team,

    Myself manufacture, i sold one product and given to customer for 1year warranty. the product got failures on 10th month…can i replace with Delivery chellan…..wat is the GST act for this kind of transaction…

    Thanks
    Yuvaraj S

  2. Chhavi Kumar Mor says:

    If a company want to send any movable asset like laptop to their employee in other state and for which cost is more than 50 thousand.

    Can company send the laptop on delivery challan, or without issuing any invoice..?

  3. ranbir Singh Balwadfa says:

    what is the difference between a delivery challan and a tax invoice, can a supplier send consignment on a DC and subsequently regularise it by sending a tax invoince, then what should be the procedure for gate entry in that case?
    please advise

  4. Vipul Singh says:

    Hello Sir
    I need to send back material to the supplier and in our system Delivery challan is raised with a debit note number. But in the header Delivery challan is mentioned which supplier is saying Debit note should be mentioned.

  5. HS Negi says:

    Please guide can we make delivery challan in case where we transfer the machinery for one location to another location as per business requirement, repairing, rewinding etc.

  6. SUNIL MONGA says:

    I sale some product sale own vehicle for no of shops how can prepare delivery Challan, for this product spouse my product rate Rs- 1000+GST 280 total Rs-1280

  7. SUNIL MONGA says:

    I sale some product sale own vehicle for no of shops how can prepare delivery challan, for this product spouse my product rate without gst Rs- 1000+gst 280 total Rs-1280

  8. Pawan Pugalia says:

    We are usually supplying and installing branding products of coroporates only.
    Need clarification on this :-

    1. There are quite no.of shops but some of the branding products are not installed on way to destination hence is returned .
    Since Invoicing is done centrally ,How to prepare Delivery challan in such a situation and also product of more than 10 shop at time in delivery vehicle…Since invoicing has to done centrally.

  9. asit kumar mandal says:

    sir i have a stone chips crusher. i sell chips to a contractaor as examlpe 100 trucks in a month ,then can i give him delivery challan or other document for per trip of supply and issue one and only tax invice in a month. is it possile on GST

  10. Basavaraj says:

    If by mistakenly we supplied less quantity of products of invoice . In this case what is the procedure to re send the remaining quantity of the products

  11. BAIJU K V says:

    good day sir
    i had sent cardamom from tamilnadu to kumily through proper DC and Ewaybill for pooling in auction. But the goods not sold in auction so i would like return goods.
    Kindly advise

  12. Jatin says:

    Dear sir,

    We received some goods for repairing via delivery challan. At the time of dispatch the goods after repairing we issue a tax invoice, which mentioned the value of repairing.
    Should we issue a delivery challan against the delivery challan (we received) or only invoice is sufficient?

    Thanks

  13. RK SONI says:

    Sir,

    In case e-way bill is generated on the basis of delivery challan instead of invoice. Is there any time limit for collecting the bill from the supplier. Is e-way bill need to be raised again after receipt of bill from the supplier. Please clarify

    Thanks/Regards

    1. Vidhi says:

      You can prepare delivery challan, mentioning purpose of repairing. Please make sure DC contain all relevant information including item name, HSN, qty etc.

  14. Devendra says:

    if consignor from mumbai &
    billing address west bangal
    but materiel delivery address is vishakhapatnam.

    can materiel will be dispatched on GST no. of west bangal ?

  15. Vinit Pandye says:

    Dear Sir

    As per Rule 55(4) of CGST Rules , ” Where goods transported are for the purpose of ………invoice after delivery of goods ” allow us to send the material without invoice.
    Is the person who is managing is treated as agent ?

  16. Mohammad Govani says:

    What ia the meaming of goods are dispatched for the purpose of supply to recipient in case lf dispatch of material using Delivery challan (without issuing invoice at the time of removal goods)..?

    We are in steel business.. Our materials usually lying at warehouse where we dont have offices, and ware houses are at remote places.. We used to mail Delivery challans to transporters or to warehouse office and they used to take print out of DC and dispatch the material.. What is the permissiblity of this practice in GST?

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