A delivery challan is the document that travels with goods when they move without a tax invoice, for example when you send material to a job worker or move goods for a reason other than a sale. Under Rule 55 of the CGST Rules, a challan replaces the invoice only in specific situations; if the movement is a taxable supply, you need a tax invoice instead. Most pure service businesses rarely need one, but the moment you ship equipment or material, it becomes relevant.
Key takeaways
- A delivery challan covers movement of goods where no tax invoice is issued at the time of removal.
- Rule 55 lists the main cases: job work, movement other than by way of supply, liquid gas where quantity is not known at removal, and other notified cases.
- It must carry specific details, including number and date, consigner and consignee details, HSN code, description, quantity and value.
- It is usually prepared in three copies: for the consignee, the transporter and the consigner.
- Services are not "delivered" on challans; service exporters only need one when physical goods move.
When a delivery challan is used
Rule 55 of the CGST Rules allows a delivery challan instead of a tax invoice in a limited set of situations. In everyday business terms, these are the common ones:
| Situation | Challan or invoice? | Example |
|---|---|---|
| Goods sent for job work | Delivery challan | Fabric sent to a dyeing unit, to come back processed |
| Goods moved for reasons other than supply | Delivery challan | Exhibition stock, goods sent for repair, equipment moved to a project site |
| Liquid gas where the quantity is not known at removal | Delivery challan | Gas supplied by tanker, invoiced after measurement |
| Goods sent on approval, where the sale is not yet final | Commonly a challan, invoice later | Samples sent to a buyer to accept or return |
| Large consignments sent in parts (e.g. machinery in batches) | Invoice before first batch, challans for the rest | A plant shipped over several trucks |
| Ordinary sale of goods | Tax invoice | Stock sold to a customer |
| Transfer to your own branch with a different GSTIN | Usually a tax invoice | Distinct registrations can make it a supply |
The last row trips people up. Movement between branches registered under different GSTINs can count as a supply, which needs an invoice, not a challan. If you are unsure, ask your CA before the goods leave.
What a delivery challan must contain
Rule 55 sets out the details. A practical delivery challan format includes:
| Field | What to enter |
|---|---|
| Challan number | Consecutive serial number, unique for the financial year |
| Date of issue | The date goods are removed |
| Consigner details | Name, address and GSTIN |
| Consignee details | Name, address and GSTIN or UIN if registered |
| HSN code and description | For each item |
| Quantity | Provisional quantity where the exact figure is not known |
| Taxable value | Value of the goods |
| Tax rate and amount | CGST, SGST, IGST or UTGST and cess, where the movement is for supply to the consignee |
| Place of supply | For inter-state movement |
| Signature | Of the supplier or authorised representative |
If your business also deals in services, remember that HSN codes are for goods and SAC codes for services. A challan is about goods, so it uses HSN. Our note on HSN vs SAC codes explains the difference.
The three copies
The challan is generally prepared in triplicate:
- Original, marked for the consignee.
- Duplicate, marked for the transporter.
- Triplicate, kept by the consigner.
Where an e-way bill is required for the movement, the challan details are reflected in it. Whether an e-way bill is needed depends on value, distance and the nature of movement, so check the current rules or ask your CA.
A sample delivery challan layout
``` DELIVERY CHALLAN Original for Consignee
Challan No.: DC/2026-27/014 Date: 18 November 2026 Reason for movement: Job work
Consigner: Surya Prints LLP, Ring Road, Surat, Gujarat GSTIN: [GSTIN]
Consignee: [Job worker name], Sachin, Surat, Gujarat GSTIN: [GSTIN]
Sr | Description | HSN | Qty | Value (Rs) 1 | Grey cotton fabric | [HSN] | 1,200 m | 1,44,000 2 | Grey rayon fabric | [HSN] | 800 m | 88,000 Total | 2,32,000
Goods to be returned after processing.
For Surya Prints LLP [Signature] Authorised Signatory ```
The fabric is going out for processing and coming back, so this is job work, not a sale. No tax amount is shown because the movement is not a supply to the job worker.
Do service businesses ever need one?
A software company, consultancy or design studio delivers its work electronically, and no challan is involved. But physical goods do move in service businesses from time to time:
- Laptops or test devices sent to an employee or a project location, not as a sale.
- Equipment sent out for repair and returned.
- Demo units or display material taken to an exhibition.
In these cases, a delivery challan documents that the goods are moving without a sale. Consider Larkspur QA Labs Pvt Ltd in Bengaluru, which sends twelve test phones to its own test lab across town under the same GSTIN. A challan stating "movement for internal use, not a supply" accompanies them.
For services exported to foreign clients, the documents that matter are the export invoice and, for covered exporters, the monthly EDF under FEMA, not a challan. Goods exports follow their own process with shipping bills.
This is general information, not legal or tax advice. Rule 55 and related provisions can be amended, so confirm current requirements with your CA.
Frequently asked questions
What is a delivery challan under GST?
It is a document issued when goods are moved without a tax invoice, in situations allowed by Rule 55 of the CGST Rules, such as job work or movement other than by way of supply. It records what is being moved, from whom, to whom and why.
Is a delivery challan the same as a tax invoice?
No. A tax invoice records a taxable supply and the tax charged. A delivery challan accompanies goods where no invoice is issued at the time of removal, and in some cases a tax invoice follows later.
How many copies of a delivery challan are needed?
Generally three: the original for the consignee, the duplicate for the transporter and the triplicate for the consigner. Keep your copy with your records for the movement.
Do I need a delivery challan for services?
No. Services are not physically moved, so challans do not apply to them. A service business only needs a challan when it moves physical goods, such as equipment, without a sale.
Can I use a delivery challan when sending stock to another branch?
It depends on whether the branch has a different GSTIN. Movement between distinct registrations can count as a supply that needs a tax invoice. Check with your CA before choosing the document.
Bottom line
Use a delivery challan only when goods move without a sale in the situations Rule 55 allows; anything that is a taxable supply needs a tax invoice. For those, our free GST invoice generator gives you a compliant layout, and our guide to every mandatory GST invoice field covers the details.
This guide is general information for Indian businesses, not legal or tax advice. Rules and bank processes change — confirm specifics with your AD bank or chartered accountant.