A delivery challan consists of important information about the sender of a product and the receiver of a product. It tracks transactions that keep occurring on a running basis. Delivery Challan is required in situations where issuing a GST bill is not applicable.
A delivery challan is not just a piece of paper but an identity to the shipment route a parcel shall follow and what it shall carry. It has to have specific details about the supplier, what they supply, and who will receive the supplies.
A delivery challan should have the following content –
- The delivery challan should contain the name and location of the supplier at the time of sending out the consignment
- GSTIN (click here to know more about the proper gstin number format) and PAN details of the supplier
- Number, date, and time of consignment release
- Prior notice if the delivery challan is replacing the invoice
- Description of the good or service sent out in the consignment
- The exact tax rate, the taxable amount and the total amount the shipment is worth
- The consignor details must contain their name, address at the expected delivery location, and GSTIN number. If it is an individual, then their PAN details
- If an agent or a third party is involved in transporting the goods, then the third party’s GSTIN and address details should also be mentioned
- The issuer should prepare three copies of a delivery challan.
- One named “Original for the consignee,”
- A duplicate copy for the transporter and a triplicate copy for the consigner
Issuing a Delivery Challan
Delivery challans are only issues where the issuer cannot create a GST invoice or a tax invoice. For example, if a company decides to ship 100 copper tubes to a customer, the payment for the shipment can be made in instalments. In such a situation, a GST bill cannot be generated, and thus a delivery challan must be created.
A delivery challan is also a legal document used when goods are being transported from one state to another when the goods being transported don’t immediately result in sales.
Using a Delivery Challan
According to present rules, a delivery challan is used in the following situations –
- If the goods transported are not for sales purposes (like transporting material from one warehouse to another)
- If the goods transported are in a semi-assembled form
- If goods are being furnished on approval or transported for specific job works.
- If the consigner does not know the quantity of the goods shipped by the supplier
Delivery challan is an important document that eases the burden of transporting goods between locations. The government tracks the movement of goods within and outside the country through delivery challans. From the business point of view, a delivery challan allows the consignee and the consigner to be aware of what they are sending and what they are receiving, respectively.