Delivery Challan

A delivery challan is a document created during the transportation of goods which may or may not result in sales. It is sent along with the shipped goods. It includes the details of the items shipped, quantity, buyer, and delivery address.

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Delivery Challan

Delivery Challan is an essential approving document utilised by businesses across the world to register the movements of goods. It is a document or record generated during the shipment of goods from one spot to another. This may or may not appear in sales. This is transferred along with the exported goods. It includes the specifications of the items sent, the quantity or amount of those goods, buyer and shipment address.

Checklist Requirements of delivery challan

A delivery challan must possess the below list of requirements

  • Number and date of the delivery challan
  • Name, location or address, GSTIN, and PAN of supplier details
  • Explanation and description of the Goods or service, Quantity, HSN, and UQC
  • Place of stock
  • The Amount of Tax, taxable value, total value, Rate of Tax.
  • Address, name, and GSTIN of the consigner details
  • Moreover, name, address and GSTIN or Unique Identity Number of the agent or representative, if disclosed
  • 'Delivery challan instead of statement or invoice' - if it is issued in place of invoice on specific Delivery Challan
Documents Required for Delivery Challan

Features of a delivery challan

Issuing a delivery challan

Normally, goods or services are provided by a supplier to a resulting in the purchase of such goods and return against those services or goods will be accepted as per the contract.

But there can be conditions where services or goods are granted to the customer. But, this transfer of goods or services does not appear in a sale quickly or payment against those goods or services are not to be taken.

For instance, if a person sends 10 parts of iron rod sticks to the other person in a circle shape. This does not result in the sale immediately on sending the goods to that person. Hence, to show such goods to transfer, delivery challan is declared.

Usually, three prints or copies of delivery challan are created:

  • Original copy for the customer
  • Duplicate copy for the transporter
  • Triplicate for the dealer

Additionally, it is a legal document that is produced in states where goods are being carried from different places which may or may not result in purchases. For instance, the transfer of goods from the Head Office to its affiliates, delivery challans are transferred along with the purchase of goods.

Declaring a delivery challan

There are many places where a delivery challan is declared:

  • Goods being furnished on approval
  • Further, goods being transported or moved for job work
  • Goods being carried for reason other than supply. For instance, transport of goods from one repository to another repository of the supplier.
  • Goods has its supply when the quantity of goods provided is not known. For example, the supply of liquid gas, where the amount of stocks from the place of supplier is not recognised at the time of supply.
  • Shipping of goods in a semi-assembled state

Using a delivery challan

A prescribed setup has been implemented by the government for a delivery challan. Let us know the step by step method on how to use delivery challan for transportation of goods:

  • Check whether the purchase or transaction is a supply or not: The first move is to examine whether the transaction is provided or not under GST. This is because if the sale is handled as supply under GST. Then, a proper tax bill or invoice is expected to be announced. Additionally, in other words, for those actions which are not used as supply under GST registration, a delivery challan is expected to be issued.
  • Build delivery challan holding proper details: As per GST commands, the following are the conditions to be followed in every challan:
    • a. Date and the serial number of delivery challan. Further, name, home address, and GSTN of the agent
    • b. Surname, business location, and GSTN of the user and HSN code representing the goods being transported
    • c. Quantity of the goods and the tax rate of goods
    • d. Tax amount and rate from the state, central and others.
    • e. Place of supply and signature of the buyer

Contents of a delivery challan

A delivery challan typically includes the following features:

  • Date of challan and date of shipping
  • Further, it is mandatory to mention the serial number of the challan. It helps to identify and easily connect to the challan.
  • Name, location, and GSTIN of sender and receiver. In the situation the customer is not enrolled, his place of the company must be notified.
  • Specifications of goods such as specification or description, HSN Code, Quantity, assessable value, GST Rate, GST amount broken up into CGST, IGST, and SGST.
  • Sign of the sender or approved person of the sender.
  • Features of transport such as appearance or mode and vehicle number.

The Format of a Delivery Challan

Delivery challans under GST have a particular format. It has a setup according to Rule 55 (2) of CGST Rules.

  • The number and date of the delivery challan
  • Further, the serial number of the delivery challan
  • The name and the location of a certified supplier
  • The name and the particular identity of the customer
  • The quantity and the classification of the goods, which includes their HSN code
  • The name and address of the transporter, otherwise known as the consigner
  • The location where the delivery is to be made
  • Signature

These are the most important features that must be involved in a delivery challan. To make a challan more effective, be keen on taking the correct details of the goods such as the HSN Code Rate, their taxable rate, and their information.

It is also essential to note that the inclusion of a serial number in a delivery challan is mandatory. This is because a serial number recognises a challan and makes it simple to refer to a special challan. Furthermore, in cases where the receiver of goods is not registered, the address of a business must be considered in a delivery challan.

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