Delivery challan rules

Last checked 2 November 2026

When a delivery challan is used

Rule 55 of the CGST Rules allows a challan in place of an invoice for:

• Job work: sending material to a job worker and getting it back.
• Transport other than by way of supply: goods sent for repair, for exhibition, to your own godown in the same State, or returnable packing.
• Liquid gas where the exact quantity is not known when it leaves.
• Goods sent on approval (sale or return): the invoice follows when the buyer accepts, or within six months.
• Goods in parts or batches (completely or semi-knocked-down) under one invoice.

A transfer to your own branch in another State is a supply between distinct persons, so it needs a tax invoice, not a challan.

What the challan must show

1. Date and a serial number of up to 16 characters, unique for the financial year.
2. Name, address and GSTIN of the consignor (if registered).
3. Name, address and GSTIN or UIN of the consignee (if registered).
4. HSN code and description of goods.
5. Quantity (provisional, where the exact quantity is not known).
6. Taxable value.
7. Tax rate and tax amount, CGST, SGST, IGST and cess, where the goods move for supply to the consignee.
8. Place of supply, for inter-State movement.
9. Signature.

Copies: original for the consignee, duplicate for the transporter, triplicate for the consignor. See the delivery challan format.

Challans and e-way bills

A challan is a valid document for an e-way bill. If the consignment value is over ₹50,000 (or your State’s limit within the State), generate an e-way bill and mention its number. Two cases need an e-way bill whatever the value: inter-State movement of goods to or from a job worker, and inter-State movement of handicraft goods by a person exempt from registration. See e-way bill rules.

Goods sent in batches

For goods sent in several lots under one sale, like machinery shipped in parts (Rule 55(5)):

1. Issue the complete tax invoice before the first lot leaves.
2. Send each lot with a delivery challan that refers to the invoice.
3. Send the original invoice with the last lot.

Job work time limits

Section 143 lets you send inputs and capital goods to a job worker without paying tax, if they come back in time:

Report movements to and from job workers in Form ITC-04: half-yearly if your turnover is above ₹5 crore, yearly otherwise.

A worked example

A Rajkot pump maker sends 200 castings worth ₹1,60,000 to a machining job worker in the same city.

• Document: delivery challan DC/26-27/031, purpose “job work”, HSN 7325, quantity 200 NOS, value ₹1,60,000.
• No tax charged: the castings remain the pump maker’s.
• Value above ₹50,000, so an e-way bill is generated against the challan (assuming the State applies the ₹50,000 limit to movement within the State).
• The job worker returns the machined castings with its own challan and a tax invoice for its job charges at the job-work rate that applies.

Common mistakes

• Selling on a challan and never raising the invoice. A challan does not replace an invoice for a sale.
• Using a challan for a transfer to a branch in another State.
• Leaving out the value: the challan needs a taxable value even when no tax is charged.
• Losing track of job-work goods past one year.

Challan or invoice? A quick test

How billinginfo helps

billinginfo makes delivery challans with their own numbering, prints them on A4 or A5, and converts a challan into a sales invoice in one tap when the sale happens. On paid plans you can generate an e-way bill straight from the challan.