Delivery Challan: When to issue Delivery Challan under GST, Manner of issue & Format
There are certain instances where the sale of goods or services does not take place immediately, in such cases, the supplier issues a delivery challan and the final invoice is raised later in such cases. Therefore, in such circumstances, the delivery challan or dispatch challan acts as a principal document of transportation of goods between the supplier and the buyer.
According to Section 31 of the CGST Act, 2017, A registered person making supply of taxable goods is required to issue a tax invoice showing the description of goods along with quantity, taxable value and the tax charged thereon. Thus, the tax invoice is principal document to be accompanied while transporting the goods from one place to another. However, Rule 55 of the CGST Rules specifies the cases where goods can be transported through delivery challan rather than tax invoice. Let’s discuss the meaning of Delivery Challan and the cases where it can be issued…
What is Delivery Challan?
A Delivery Challan is a document used for transportation of goods from one place to another. Where the invoice is not raised, the delivery challan serves as a proof of delivery of goods. It contains the details about the goods transported namely description of goods, quantity and date of delivery etc. Delivery challan ensures that goods are delivered to the buyer with transparency as per the GST provisions.
Instances where delivery challan can be issued under GST for transportation of goods rather than invoice
As per Rule 55(1) of the CGST Rules, following are the instances when delivery challan can be issued for transportation of goods without an invoice:
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Supply of liquid gas where the quantity at the time of removal from the place of the supplier is not known |
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Transportation of goods for job work- In case of job work, delivery challan is required when goods are sent by principal to the job worker or another job worker or return of goods after job work to principal |
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Transportation of goods for reasons other than by way of supply-
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Transportation of goods in lots or knocked down condition Many times, the goods under a single invoice are required to be transported in semi-knocked down or complete-knock down conditions or in batches/lots. In such case before supply of first consignment, the supplier issues a single invoice for multiple consignments and all subsequent consignments are transported under delivery challan giving reference to the invoice. Each consignment shall be accompanied by copies of the corresponding delivery challan along with a duly certified copy of the invoice. The original copy of invoice shall be sent along with the last consignment. [Refer Rule 55(5) & Notification No. 39/2018- central tax] |
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Such other supplies as may be notified by the Board |
Format and Particulars of Delivery Challan under GST
Rule 55(1) of the CGST Rules provides the following for the particulars to be furnished in delivery challan:
- Delivery challan should be serially numbered not exceeding 16 characters, in one or more multiple series
- Date and Number of Delivery Challan
- Name and address and GSTIN of the consigner, if registered
- Name, address and GSTIN/UIN of the consignee, if registered
- HSN code along with description of goods
- Quantity (provisional where the exact quantity being supplied is not known)
- Taxable Value
- Tax rate and tax amount showing classification in CGST, SGST, IGST, UTGST or Cess, where the transportation is for supply to the consignee
- Place of supply, in case of inter-state movement and
- Signature
Procedure for Issuing Delivery Challan
According to Rule 55(2) of the CGST Rules, Delivery Challan will be issued in Triplicate as follows:
- ORIGINAL COPY marked as “Original for Consignee”
- DUPLICATE COPY marked as “Duplicate for Transporter”
- TRIPLICATE COPY marked as “Triplicate for Consigner”
When goods are being transported on a delivery challan in place of invoice, the same shall be declared and supported by e-way bill, as specified in rule 138 of the CGST Rules.
When 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.
Difference between Tax Invoice and Delivery Challan
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Tax Invoice |
Delivery Challan |
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A Tax invoice is a documentation proof of transfer of ownership to the buyer. |
Delivery Challan does not contain any such proof of transfer of ownership |
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Tax invoice shows the actual value of goods |
Delivery Challan is merely an acknowledgment of receipt of goods |
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Tax invoice shows that the sale has taken place |
Goods sent under delivery challan may or may not result in sale |
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Tax invoice can be used as a valid claim of input tax credit |
Input tax credit can not be taken on the basis of a delivery challan |
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Provisions of e-invoicing and QR code are applicable to tax invoice |
Provisions of e-invoicing and QR code does not apply to delivery challan |
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