As a businessperson, are questions like “how to make delivery challan in tally” or “how to make delivery challan in excel” or “how to generate e way bill for delivery challan” placing you in a dilemma? A delivery challan, also known as a dispatch challan or a delivery slip, is a document that details the kind, condition, and a number of things delivered. A delivery challan is a vital piece of equipment used by practically every company in regular operations. On the other hand, this page covers everything there is to know about delivery challans.


Delivery Challans are an important instrument in the safe transportation of products since they help trace and verify the contents of deliveries. We’ve included the definition, structure, and template of a Delivery Challan below if you’re not aware of the phrase.

A tax invoice is generated for each exchange of goods or services done under GST. On the other hand, some transactions are not considered supplies yet must be transported from one area to another.

A tax invoice cannot be generated since it is not a supply in any of these cases; instead, a delivery challan must be given.

Furthermore, following a goods-and-services transaction, the recipient normally pays the payment right away. In other cases, though, the payment can take a bit longer. In these circumstances, the supplier will give a delivery challan detailing the expenses of the products and services.

Table Of Contents

  1. What is a delivery challan?
  2. Delivery challan meaning
  3. Format and Contents of a delivery challan
  4. Major components of a delivery challan
  5. Businesses that need a delivery challan
  6. Why is a delivery challan needed?
  7. Differences between tax invoice and delivery challan
  8. How to ensure an efficient delivery challan?
  9. When to issue a delivery challan?
  10. Frequently asked questions
  11. The bottom line

Gimbooks is a cloud-based bookkeeping and accounting platform aimed at small and micro-sized businesses that help them create and manage documents (such as GST compliant invoices, waybills, quotations, purchase orders, delivery challans, and so on). It also helps businesses keep track of day-to-day inventory and expenses, manage various business reports, and send payment reminders to customers via mobile and web. GimBooks' major goal is to make business easier for millions of people by delivering a mobile-first, simple-to-use, and inexpensive solution.

What Is A Delivery Challan?

A tax invoice must be filed whenever a registered supplier moves taxable items from one location to another, according to Section 31 of the CGST Act, 2017. The number of products, their description, value, GST imposed on them, and other information required by Section 31(1) of the Act are included on this tax invoice. However, in other circumstances, goods transportation does not result in a sale or supply, and hence no tax invoice is generated. Instead, a delivery challan is issued in such circumstances. Suppliers employ the delivery challan format when conveying items that are not meant for immediate sale and generate a delivery challan. As a result, a delivery challan is a document produced when items are transferred to another location but are not intended for sale, and no GST is charged on such a supply. A dispatch challan or delivery slip is another name for a delivery challan. It includes information on the products being carried. For example, this challan will be issued if a factory transports items from one warehouse to another.

What Is The Meaning Of A Delivery Challan?

A delivery challan is a legal instrument used to transport goods from one location to another, which may or may not result in a sale.

The things being delivered are accompanied by this delivery challan. The majority of the information on this delivery challan is about the products provided, the number of goods labelled for delivery, the buyer's address, and the shipping address. There are three primary sorts of copies created for distributing challans. These are the ones:

* Original Delivery challan is issued to the buyer

* A duplicate is given to the Transporter

* A third copy of the Challan is for Seller

A delivery challan, also known as a delivery slip or a dispatch challan, is a document that gives details about the things being delivered, such as quantity, shape, and specifications.

This challan includes the recipient's details and the delivery location and time. A delivery challan's main goal is to make the transfer of products easier.

It is important to note that the delivery challan is carried together with the delivered things. It is a vital document necessary for practically every business transaction.

Format And Contents Of A Delivery Challan

A Delivery Challan must be granted when things are transported or transferred inside or beyond state borders with authorisation to sell or return and are withdrawn before the delivery happens.

The GST mandates that these Challans have serial numbers of no more than sixteen characters in one or more series.

The challan, which contains crucial information about the commodities in transit, such as the quantity, buyer, and delivery address, must be transported with the GST-registered products.

It contains the specifics of the things carried, the quantity of these items, the buyer's identity and other delivery details.

The supplier may provide the consumer with payment options such as bank transfer, cash, or check.

You must provide the following information on a Delivery Challan to create one.

  • Date and the serial number of the delivery challan
  • Name and address of the registered vendor
  • Name and identity of the buyer
  • Quantity and description of the goods, inclusive of their HSN code
  • Name and address of the transporter, also known as a consigner
  • Place of delivery of goods
  • Signature

To make an error-free challan, record the specific details about the products, such as their taxable value, description, and HSN number.

The importance of the delivery challan serial number should be emphasised since it aids in identifying and making future references easier. Furthermore, if the person receiving the merchandise is not registered, the delivery challan must include the business's address.

Major Components Of A Delivery Challan

The major components of a Delivery challan are as follows:

  • The date and number of the challan's creation. Keep in mind that the Challan must be serially numbered.
  • It should include the name, address, and GSTIN number of the consignor.
  • The name, address, and GSTIN number of the consignee should also be included. The Challan should contain the place of supply if the consignee is not registered.
  • All of the commodities that are transported should have HSN codes.
  • It should provide a list of the goods that were provided.
  • It should include the tentative or precise amount (if feasible) of the things being provided.
  • It contains the tax-exempt amount of the supply.
  • It should provide a detailed description of the relevant GST, including IGST, CGST, SGST, and cess.
  • If there's an interstate transfer, it should also specify the delivery address.
  • Finally, it should bear the signature of the provider or any of their authorised representatives.

Businesses That Need A Delivery Challan

As previously stated, a delivery challan is useful in various situations involving the transfer of items that are not intended for sale. The following are some examples of firms that require these challans under GST:

  • Firms that deal in the exchange of goods, often known as trading businesses.
  • Owners of many warehouses with items being transferred between them on a regular basis.
  • Suppliers of goods
  • Wholesalers of goods
  • Manufacturers of goods

Why Is A Delivery Challan Needed?

Suppliers can provide a delivery challan instead of an invoice in certain circumstances, according to Section 55(1) of the CGST Rules. The following are examples of challans being issued under GST:

  • When the amount of things delivered is unknown. Consider the case of delivering liquid gas when the quantity of gas being withdrawn from the supplier's location is unknown.
  • When products are being moved to complete a project. The delivery challan is required in any of the following situations:
  • If a principal is giving items to a worker on the job.
  • If one employee transports products to another employee.
  • If the employee is returning products to the principal.
  • Before the items are finally given, they must be transported. Moving items from a factory to a warehouse or one warehouse to another is an example.

Furthermore, in some situations, providing this challan in an acceptable format is required to transport goods. The following are examples of such situations:

  • When the goods are transported on an approval basis

A challan is required if products are transferred inter or intra-state on a sale or return basis and then withdrawn before the supply occurs.

  • When work of art is transported to galleries

If pieces of art need to be transported to galleries for exhibition, these challans can be used.

  • Transporting goods abroad for promotion or exhibition

According to CBIC Circular No. 108/27/2019-GST dated July 18, 2019, items delivered beyond India for display or promotional purposes cannot be classified as "supply" or "export." As a result, such transportation should be done in accordance with this challan.

  • Transporting goods in multiple shipments

If items are carried in a partially or fully constructed form utilising several means of shipping, the provider must produce a tax invoice when transporting the first consignment. Then, for each succeeding shipment, a challan should be issued with reference to the invoice.

  • When issuing tax invoice is not possible at the time of removing the goods

Suppose the items being carried are meant for sale or supply, but the provider is unable to submit a tax invoice. In that case, the supplier can issue a delivery challan and transport the goods, according to Rule 55(4) of the CGST and SGST Rules, 2017. After the products are delivered, the tax invoice will be provided.

  • When an e-way bill is not needed

The products shall be carried using this challan if the e-way bill is not required and in circumstances where the tax invoice or Bill of Supply is not required, as per Rule 55A of the CGST Rules, which took effect on January 23, 2018.

The Difference Between Tax Invoice & Delivery Challan

An invoice is a document that confirms the consumer's legal ownership of goods. A consumer's invoice is more than simply a piece of paper.

It is an evidence that the consumer has accepted to take full ownership of the objects in issue, including all rights, risks, and obligations that come with them.

When goods are carried in many shipments and are partially or completely knocked down, the vendor must provide a complete invoice before sending the main cargo and a delivery challan concerning the invoice for each of the following consignments.

A challan has just one purpose: to prove that the customer has acknowledged the receipt of goods, but not their legal ownership or responsibilities, as previously indicated.

Another small difference between both papers is that an invoice specifies the number of items given, but a challan does not.

Nonetheless, in some cases, a challan may appear to show the worth of products, but it will never indicate the tax levied on a customer.

It's also worth noting that you may combine an invoice with a challan to generate a Tax invoice cum delivery challan.

How To Ensure An Efficient Delivery Challan?

To make a challan more efficient, pay attention to the finer points of the items, such as the HSN code, taxable value, and description.

It's also worth noting that including a serial number in a delivery challan is required. This is because a serial number uniquely identifies a challan and makes it simple to locate one. Furthermore, in the event of non-registered recipients of products, the delivery challan should include the business's address.

When To Issue A Delivery Challan?

You're probably having trouble coming up with a response to this question. The following conditions force you to issue a challan:

  1. When you need to know how many things you'll be sending out at a certain moment.
  2. When the location of the supplier's firm is unknown to the recipient of products.
  3. When you're supplying things once they've been approved.
  4. When you're carrying materials for a task.
  5. You can issue a delivery challan in any of these situations.

Frequently Asked Questions

1. Are there any rules for a delivery challan?

CGST Rule 55 governs the provision of a delivery challan (2). According to the rules, it should be delivered in three copies. The original copy goes to the consignee or the person who gets the goods; the second copy goes to the item's transporter, and the triple copy goes to the consignor or the products' source.

2. Can you issue a delivery challan if goods are transported inter-state?

Yes, a delivery challan can be used to carry things across state borders from one warehouse to another. You should also double-check that the format contains information about the warehouses.

3. How to generate an e-way bill for delivery challan?

The delivery challan, invoice, or bill of sale, as well as the transporter's ID, must be provided in order for the e-way bill to be created.

4. What is a non-returnable delivery challan?

If a non-returnable gate pass accompanies the delivery challan, the authorities will be able to see that the items have been delivered in full and cannot be returned.

5. What is a returnable delivery challan?

For things that are transported out of the warehouse for a specific purpose and are expected to be returned soon, a returnable challan will be created.

6. What is Delivery Challan for job work in GST?

A delivery challan is necessary when the principal sends products to a job worker, when one job worker sends goods to another job worker, or when things are returned to the principal after job labor.

The Bottom Line

A culture of record-keeping should be cultivated in any successful business organisation. In order to keep records, accounting records and other important papers should be kept. One such document is the delivery challan.

The Challan shall accompany the goods when CGST rules rule 55A of the CGST Rules established w.e.f. 23-1-2018 does not need a person to carry an e-way bill, and where a tax invoice or Bill of Supply is not required.

Using inventory management software like Lio can assist in centralising this procedure. Lio makes keeping track of inventory purchases and sales a lot easier. A sales order and a delivery challan may be created in only a few clicks.