December 29, 2022
Reddy Mohith

Delivery Challan Meaning and Format

The essential step of every business is transporting the goods from the warehouse to their respective destinations. Sometimes this process might get trickier as it holds the chances of products missing due to theft, spillage, or the customer might even receive a defective product. And to deal with these situations, delivery challans help you in the process.

Meaning of a delivery challan:

Delivery challan is a formal document created by the producer with the product details, like the name, quantity, and specifications. It is generated when there is a need for product transfer from one place to another. It does not always have to be from a seller to a consumer. For example, this printed formal document goes along when the products move from the warehouse to its sub-branches.

Use cases of delivery challans:

1. When transporting the goods on a sale

2. When transporting the office goods

3. When hauling the goods from the issuer to their sub-branches

4. When the delivered quantity of goods is not known

5. When the supplied goods are of art for exhibitions

6. When the goods are getting sent abroad

7. When the seller cannot issue a tax invoice during the removal of goods

For Example:

1. Moving the goods from the old warehouse to the new warehouse

2. Goods moving to their respective owners

3. The act of repositioning the products in the semi-assembled state and others.

Format of a delivery challan:

1. Seller's name, address, and GSTIN

2. Buyer's name, address, and GSTIN

3. HSN code

4. Product's description

5. Price and the quantity of the items, along with the money in figures and words

6. Supplier's or any other authorized person's signature

7. Date of challan

8. Challan's serial number

9. Name of the issuing place

10. Tax amount (if applicable)

Businesses using a delivery challan:

1. Enterprises involved in trading and manufacturing (the FMCG industry as a whole, in particular)

2. Larger enterprises like Amazon, Walmart, and Flipkart, where the goods transportation takes place from the production house to the other warehouses (clothing, textiles, and apparel industries)

3. Firms that supply goods (courier services and home furnishing industries)

4. Wholesale businesses (electronic and electrical industries)

GST rules on delivery challan:

Products about the invoice value, goods description, quantities, prices, and the GST applicability on the products form a tax invoice. The seller must issue the tax invoice when transporting the goods from the production home to other places as per the provisions of Section 31 of the CGST Act. The tax invoice is mandatory when transporting products for sale.

Sometimes, issues arise when the goods transportation is not for sale, so there is no need for a tax invoice. However, businesses must use delivery challan instead. Delivery challan enables the goods to transport from one place to another. So, people also call it a delivery slip or a dispatch slip.

According to Rule 55 (2) of the CGST Rules, the dispatch slip should have three copies.

1. Original - for buyer

2. Duplicate - for transporter

3. Triplicate - for seller

Difference between the tax invoice and deliver challan:

1. Tax invoices contain ownership and legal responsibilities, while delivery challan does not.

2. Delivery challan shows the customer's acknowledgment of goods receipt, while tax invoices exhibit the actual value.

3. A tax invoice is proof of sale, while the delivery challan may or may not result in sales.

4. Delivery challan displays only the value of a product without the total price of the deal, while the tax invoice depicts the actual value of the sale, including the GST.

Create the best delivery challan using Swipe:

Swipe is the only place you need to meet all your financial requests. You can do everything on Swipe - from generating invoices to printing the best tax invoices to issuing accurate delivery challans. Swipe is a free, user-friendly software with 41 features that match everybody's request.

FAQ's Answered

1. Who issues delivery challans?

The seller issues the delivery challan to the customer when purchasing the goods. These transported goods may or may not result in sales.

2. What is the difference between a delivery challan and a delivery note?

A delivery note is a simple document that comes with the product's delivery. A delivery challan is a formal document issued to the customer when delivering the sales and impacting the inventory levels.

3. What is a non-returnable delivery challan?

When a product delivery accompanies a non-returnable delivery challan, it tells the authorities that the sale is final and will not return the delivered products.

4. What is a returnable challan?

When the transported products are due to return to the warehouse shortly, the returnable delivery challan gets issued.


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