Business Software
Move beyond one-off tools. Run your workspace in sync.
Free tools in your browser, always. Move to Business Software when you need CRM, proposals, invoicing and the client portal working together.
Free tools in your browser, always. Move to Business Software when you need CRM, proposals, invoicing and the client portal working together.
What a delivery challan is, how it differs from a GST tax invoice, when Rule 55 of the CGST Rules allows goods to move on a challan, what it should contain, and how it relates to the e-way bill.
Checked against current rules for Delivery challan in lieu of invoice for the cases listed in Rule 55 of the CGST Rules (liquid gas, job work, transportation for reasons other than supply, and notified supplies); tax invoice for a taxable supply under Section 31 of the CGST Act; e-way bill under Rule 138 of the CGST Rules on 29 September 2026. Source: CBIC — Section 31, CGST Act, 2017; Rules 46, 55 and 138, CGST Rules, 2017 (as amended).
A delivery challan is a document that goes with goods when they are moved from one place to another. It is issued by the sender, whom the CGST Rules call the consigner, and it records who is sending the goods, who is receiving them (the consignee), what the goods are and how many are being moved.
Businesses use challans to show what left the premises and what the receiver should check on arrival, and to keep goods movement traceable even when no sale invoice is being issued for that movement. Under Rule 55 of the CGST Rules, a challan can also serve in place of an invoice for certain movements, which is where it differs from an ordinary delivery note.
A delivery challan is not a tax invoice and is not proof of payment. This article is general information based on the CGST Act and Rules as published by CBIC, not legal or tax advice for your specific movement of goods.
Free Delivery Challan Generator
Create a professional delivery challan online for free — document the movement of goods from sender to receiver, with optional transport details, then preview, print or download it as a PDF.
What is a delivery challan?
A delivery challan is a document issued by the party sending goods (the consigner) that accompanies the goods while they are transported. It identifies the sender, the receiver and the goods and quantities being moved. Under Rule 55 of the CGST Rules it can be issued in place of an invoice in certain listed cases, such as job work or transportation for reasons other than supply.
Is a delivery challan an invoice?
No. A delivery challan is not a tax invoice. For a taxable supply of goods, Section 31 of the CGST Act requires the supplier to issue a tax invoice, and a challan does not take its place. Rule 55 allows a challan in lieu of an invoice only for the specific cases it lists.
When is a delivery challan used?
Rule 55 of the CGST Rules lists the cases: supply of liquid gas where the quantity at removal is not known, transportation of goods for job work, transportation of goods for reasons other than by way of supply, and other supplies the Board may notify. A challan is also used in practice as a delivery record alongside an invoice, and Rule 55 requires one for each later lot when goods move in batches after a complete invoice has been issued.
Can goods move without an invoice?
In the cases Rule 55 lists, goods can move on a delivery challan issued in lieu of an invoice. Where the goods are being supplied to a recipient and a tax invoice could not be issued at the time of removal, Rule 55(4) says the supplier issues the tax invoice after delivery. Any e-way bill requirement under Rule 138 applies separately. Check your own situation with a tax professional.
What is the difference between a delivery challan and an e-way bill?
A delivery challan is a document you prepare for the goods. An e-way bill is an electronic document generated on the GST portal under Rule 138 before goods are moved, generally where the consignment value exceeds ₹50,000, subject to the rule's exceptions. The e-way bill does not replace the invoice or the challan, and a challan does not replace an e-way bill. Where a challan is used in lieu of an invoice, Rule 55(3) says the movement is declared as specified in Rule 138.
GST & Tax
Quotation vs Proforma Invoice vs Tax Invoice: What's the Difference?
What a quotation, an estimate, a proforma invoice and a GST tax invoice each do, when to issue which, and why only a tax invoice lets your customer claim input tax credit.
GST & Tax
What Must a GST Invoice Contain?
The mandatory particulars every GST tax invoice must show under Rule 46 of the CGST Rules — with a worked example, common mistakes, and when different invoice rules apply.
A tax invoice is the supplier's document for a taxable supply. Section 31 of the CGST Act requires a registered person supplying taxable goods to issue one before or at the time of removal of goods for supply to the recipient, where the supply involves movement of goods. It shows the description, quantity and value of the goods, the tax charged and other prescribed particulars, and it is what the recipient generally needs to claim input tax credit.
The particulars a tax invoice must carry are set out in Rule 46 and are covered in what a GST invoice must contain. If you need to prepare one, the free GST invoice generator builds it with the tax calculated for you. How the invoice sits alongside quotations and proforma invoices is explained in the quotation vs proforma invoice vs tax invoice guide.
The table below compares the two documents in general terms. The exact tax treatment depends on the nature of the movement, so read it as a guide rather than a rule for every case.
| Aspect | Delivery challan | Tax invoice |
|---|---|---|
| Primary purpose | Accompanies goods being moved and records what is being moved | Documents a taxable supply and the tax charged on it |
| Issued by | The consigner (sender of the goods) | The registered supplier |
| Transaction context | Goods movement, including job work and movement for reasons other than supply | A supply of goods or services for consideration |
| Is it a tax invoice? | No | Yes |
| Used for payment or accounting? | Not as a payment demand; it is a movement record | Yes, it is the basis for billing and for books of account |
| Typical uses | Job work, movement not by way of supply, later lots of a batched supply, delivery record | Ordinary sales of taxable goods |
| GST treatment | Depends on the reason for movement; tax details are listed where the movement is for supply | Shows the tax charged on the supply |
| Relationship to goods movement | Travels with the goods | Issued before or at removal of goods for supply, subject to the rule's exceptions |
| Input tax credit | Not a document on which credit is generally claimed | The document the recipient generally needs to claim credit |
Rule 55 of the CGST Rules, headed transportation of goods without issue of invoice, says the consigner may issue a delivery challan in lieu of an invoice at the time of removal of goods for transportation, for these purposes:
Rule 55 also covers goods transported in a semi knocked down or completely knocked down condition, or in batches or lots. There the supplier issues the complete invoice before dispatch of the first consignment, then a delivery challan for each subsequent consignment giving reference of the invoice. Each consignment travels with copies of its challan and a duly certified copy of the invoice, and the original invoice goes with the last consignment.
Outside these cases, many businesses still send a delivery challan or delivery note with an ordinary sale, alongside the tax invoice, so the receiver can check the goods against a record. That is a business practice and does not replace the invoice.
When you supply taxable goods to a recipient, the tax invoice is the required document. Section 31(1) of the CGST Act asks a registered person to issue it before or at the time of removal of the goods for supply where the supply involves movement of goods. The tax you charge, your customer's credit and your own returns all trace back to it.
Section 31 also deals with special situations, for example goods sent on approval for sale or return, where the invoice is to be issued before or at the time of supply or within six months from the date of removal, whichever is earlier. If your supply has an unusual timing pattern, confirm it with a tax professional instead of relying on a general guide.
Not for an ordinary taxable sale. Rule 55 allows a challan in lieu of an invoice only for the purposes it lists, and it says the goods so moved must be declared as specified in Rule 138. For a supply to a recipient, the tax invoice is still needed: Rule 55(4) says that where goods are transported for supply and the tax invoice could not be issued at the time of removal, the supplier issues it after delivery.
So goods can move under a challan without the challan being the tax invoice. The challan covers the movement; a supply, where there is one, still needs its tax invoice. A recipient asking for input tax credit will ordinarily need that tax invoice, not the challan. Neither document records that money was received, which is the job of a payment receipt.
Where a challan is issued in lieu of an invoice under Rule 55(1), the rule lists the following particulars. The number must be serial and not exceed sixteen characters, in one or multiple series.
| Particular under Rule 55(1) | Notes |
|---|---|
| Date and number of the delivery challan | Serially numbered, not more than sixteen characters |
| Consigner's name, address and GSTIN | GSTIN if registered |
| Consignee's name, address and GSTIN or UIN | GSTIN or UIN if registered |
| HSN code and description of goods | Harmonised System of Nomenclature code and a description |
| Quantity | Provisional where the exact quantity being supplied is not known |
| Taxable value | Listed among the particulars |
| Tax rate and tax amount | Central, State, integrated or UT tax, or cess, where the transportation is for supply to the consignee |
| Place of supply | In case of inter-State movement |
| Signature | Of the consigner |
Rule 55(2) adds that, in case of supply of goods, the challan is prepared in triplicate, marked ORIGINAL FOR CONSIGNEE, DUPLICATE FOR TRANSPORTER and TRIPLICATE FOR CONSIGNER.
Businesses often add fields the rule does not list, because they make the document more useful. These are practical additions, not statutory requirements:
These are illustrations with made-up businesses. Real cases can turn on facts that a short example leaves out, so treat them as pointers and confirm the position for your own transaction.
Example 1, goods sent for job work. A Pune manufacturer sends 200 metal brackets to a job worker in Pimpri for powder coating and expects them back. The goods are being transported for job work, one of the purposes Rule 55(1) lists, so the manufacturer can issue a delivery challan in lieu of an invoice. Nothing is being sold to the job worker, which is why the movement is not invoiced as a sale. The job worker's charge for the coating is a separate matter and is billed separately.
Example 2, movement for a reason other than supply. A company sends one demonstration unit to an exhibition in another city and intends to bring it back. No supply is intended when it leaves, so the movement falls under transportation for reasons other than by way of supply. A challan recording the reason for movement and the receiving location fits this case. If the unit is later sold, that sale needs its own tax invoice.
Example 3, an ordinary sale. A distributor sells 50 cartons to a retailer in the same city. This is a taxable supply with movement of goods, so the distributor issues a tax invoice before or at the time of removal, as Section 31(1) asks. A delivery challan or delivery note can still travel with the goods as a delivery record, but it does not stand in for the invoice.
Example 4, a supply sent in lots. A supplier is sending 900 units to a customer in three lots. Under Rule 55(5) the supplier issues the complete invoice before dispatching the first lot, and then a delivery challan for each subsequent lot that gives reference of the invoice. The original invoice travels with the last lot.
People often mix up these three because they can all appear in the same movement of goods. They do different jobs, and none of them is a universal substitute for another.
| Aspect | Delivery challan | Tax invoice | E-way bill |
|---|---|---|---|
| What it is | A document accompanying goods, issued by the consigner | The supplier's document for a taxable supply | An electronic document generated on the GST portal |
| Governing provision | Rule 55, CGST Rules | Section 31, CGST Act and Rule 46, CGST Rules | Rule 138, CGST Rules |
| Main role | Records and accompanies the movement, in lieu of invoice in listed cases | Records the supply and the tax charged | Information furnished on the portal before movement, to support transit compliance |
| When it is needed | In the cases Rule 55 lists, or as a business delivery record | For a taxable supply of goods or services | Generally where consignment value exceeds ₹50,000, subject to the rule's provisions |
Rule 138 covers movement of goods in relation to a supply, for reasons other than supply, and inward supply from an unregistered person. The consignment value is the value declared in an invoice, a bill of supply or a delivery challan, as the case may be, so a challan can be the document whose value counts. The rule has provisos and exceptions, including one that requires an e-way bill for inter-State movement from a principal to a job worker irrespective of the value. Check the current rule and your own case before relying on the ₹50,000 figure.
You can create a free delivery challan online and download it as a PDF. Enter the sender and receiver details, the challan number and date, the reason for movement, the items with quantity and unit, and any transport details such as vehicle, transporter and e-way bill number. Optional fields cover the HSN code, taxable value, tax rate and amount, place of supply, batch or serial number, purchase order reference and remarks. You can also mark the copies ORIGINAL FOR CONSIGNEE, DUPLICATE FOR TRANSPORTER and TRIPLICATE FOR CONSIGNER, and download all three in one PDF.
What the free generator does and does not do
The generator prints the taxable value, tax rate and amount, and place of supply exactly as you enter them, and it limits the challan number to the sixteen characters Rule 55(1) allows. It does not calculate any tax or total, does not check your entries against Rule 55, and cannot tell whether your movement qualifies for a challan in lieu of an invoice. Confirm the particulars your movement needs with a tax professional.
The buyer's order that usually comes first is covered in the purchase order guide, and the seller's offer that precedes it is in the quotation format and sample.
If the sale began with a price that could still change, estimate vs quotation explains how the two pre-sale documents differ.
Does a delivery challan contain GST?
It depends on the reason for movement. Rule 55(1) lists the taxable value among the particulars and lists the tax rate and tax amount where the transportation is for supply to the consignee. A challan for goods that are not being supplied would not carry tax as if it were an invoice. A challan is not a substitute for the tax invoice that a taxable supply needs.
Can a delivery challan be converted into an invoice?
Not by relabelling it. A challan and a tax invoice are separate documents with different roles. Where goods were sent for supply on a challan, the supplier issues a proper tax invoice (Rule 55(4)). It helps to quote the challan number on the invoice so the two can be reconciled.
Is a delivery challan mandatory for job work?
Rule 55(1) says the consigner "may" issue a delivery challan in lieu of invoice when goods are transported for job work, so it is the document the rule provides for that movement. Job work also carries other conditions and records under GST, and an e-way bill may be needed under Rule 138 (including for inter-State movement to a job worker regardless of value). Confirm the full requirements with a tax professional.
Free Purchase Order Generator
Create a professional purchase order online for free — a buyer's order to a vendor/supplier with optional GST estimate, then preview, print or download it as a PDF.