SUB GST P5.4

Delivery Challan

18 May 2020

What is Delivery Challan?

A delivery challan is a certificate/document created during the shipment of goods from one place to another which may or may not result in sales. This is sent along with the dispatched goods. It contains the details of the items shipped, the quantity of those goods, buyer, and delivery address.

Generally, three copies of delivery challan are generated:

• Original: For the buyer

• Duplicate: For the transporter

• Triplicate: For the seller

When is a Delivery Challan issued?

There are various conditions where a delivery challan may be issued:

• Goods supplied on approval

• Goods transported for job work

• Goods transported for reasons other than supply. 

Example: Transportation of goods from one unit to another unit of the supplier.

• Goods supply-Where the volume of goods supplied is not known. 

Example: Supply of liquid gas, where the quantity of supply from the place of supplier is not known at the time of supply.

• Transportation of goods in a semi-assembled condition.

Contents of a delivery challan

A delivery challan includes the following details:

• Date of Challan,

• Date of transportation

• Serial Number of the challan – This is mandatory. It helps easily identify the challan.

• Details of Name, address, and GSTIN of the sender and receiver.

• Details of Goods such as HSN Code, Description, Quantity, Taxable Value, GST Rate, GST Amount divided into CGST, IGST, SGST, and Cess.

• Signature of the sender or authorized person of the sender.

• transportation details such as mode and vehicle number.

The Difference Between an Invoice and A Delivery Challan

Well, here is the difference!

An invoice is a document that the customers use to confirm legal proof of ownership of the goods. With an invoice, the customer has accepted the full ownership of goods, including all the rights, risks, and liabilities that they carry along on the other hand This is not the case of delivery challan.

A delivery challan helps the sole purpose of showing that the customer has acknowledged the receipt of goods, but not their legal ownership or responsibilities.

Another small difference between these two documents is that an invoice shows the actual value of goods delivered while a delivery challan does not. In some cases, a delivery challan may include the value of goods, but it does not show the tax charged to a customer.

Also, it is worth noting that an invoice and a delivery challan can be merged to result in something referred to as a “Tax invoice cum delivery challan.”