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Delivery challan under GST

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A tax invoice shall be issued by a registered person for making any taxable supply of goods or services. However, rule 55 of CGST Rules, 2017 lists the cases where goods may be removed on delivery challan and invoice may be issued after delivery. A delivery challan contains details of the goods in that particular shipment.

When goods are transported on the basis of delivery challan in lieu of invoice,

  • the same shall be declared in E-Way Bill.
  • the supplier shall issue a tax invoice after delivery of goods.
  • Goods may be moved within the State/from the State of registration to another State for supply on approval basis and art works may be sent by artists to galleries for exhibition on delivery challan along with e-way bill wherever applicable. 

When is a delivery challan issued?

GST law allows issuance of delivery challan in the following cases:

(a) supply of liquid gas where the quantity at the time of removal from the place of business of the supplier is not known.

(b) transportation of goods for job work.

(c) transportation of goods on a sale or return basis.

(d) transportation of goods for reasons other than by way of supply such as

(i) transportation of goods from one warehouse to another warehouse of the supplier within the same state.

(ii) transportation of goods outside India for exhibition or for export promotion (GST Circular No. 108/2019).

(e) such other supplies as may be notified by the Board

Particulars of delivery challan 

The delivery challan should be serially numbered and shall contain the following details:

(i) date and number of the delivery challan;

(ii) name, address and GSTIN of the consigner, if registered;

(iii) name, address and GSTIN or Unique Identity Number of the consignee, if registered;

(iv) Harmonised System of Nomenclature (HSN) code and description of goods;

(v) quantity (provisional, where the exact quantity being supplied is not known);

(vi) taxable value;

(vii) tax rate and tax amount – central tax, State tax, integrated tax, Union territory tax or cess, where the transportation is for supply to the consignee;

(viii) place of supply, in case of inter-State movement; and

(ix) signature of the authorised person.

Delivery challan to be in triplicate

Delivery challan has to be issued in 3 copies for the supply of goods.

  • the original copy being marked as ORIGINAL FOR RECIPIENT;
  • the duplicate copy being marked as DUPLICATE FOR TRANSPORTER; and
  • the triplicate copy being marked as TRIPLICATE FOR SUPPLIER.

Period of retention of delivery challan

According to section 36 of CGST Act, every registered person is required to keep and maintain books of account including delivery challan for a period of 72 months from the due date of furnishing of annual return for the relevant year.

Transportation of goods in batches or lots

Where the goods are transported in a semi-knocked down (SKD) or completely knocked down (CKD) condition or in batches or lots,

(a) the supplier shall issue the complete invoice before dispatch of the first consignment;

(b) the supplier shall issue a delivery challan for each of the subsequent consignments, giving reference of the invoice;

(c) Copies of the corresponding delivery challan shall accompany each consignment along with a duly certified copy of the invoice; and

(d) the original copy of the invoice shall be sent along with the last consignment.

Difference between tax invoice and delivery challan

 

Tax invoice

Delivery challan

Legal proof of the ownership of goods or services.

Acknowledgment of receipt of goods.

Issuance of the tax invoice will transfer ownership of goods.

Issuance of delivery challan will not transfer ownership of goods.

An input tax credit can be claimed on the basis of tax invoice.

An input tax credit cannot be claimed on the basis of delivery challan.

Applicable in both cases i.e. goods or services.

Applicable only in case of goods.

E-Invoicing and QR Code provisions will be applicable

E-Invoicing and QR Code provisions will not be applicable

 

Format of delivery challan under GST

 

Format of delivery challan under GST

 

Recent updates

 

24th February 2022

CBIC notified the reduction in the applicability of the GST e-invoicing threshold from Rs 50 crore to Rs 20 crore with effect from 1st April 2022.

20th September 2021

CBIC has clarified that there is no need to carry the physical copy of the tax invoice in cases where an e-invoice has been generated by the supplier. Production of the Quick Response (QR) code having an embedded Invoice Reference Number (IRN) electronically, for verification by the proper officer, would suffice. (Circular No. 160/16/2021 - GST)

Frequently asked questions (FAQs)

If the goods are meant to be supplied in the course of construction an invoice is necessary. If the goods are tools which are to be used for construction then delivery challan should be issued. (Source - CBIC FAQs)

If on every instance you are making a supply then an invoice needs to be issued. For any other movement of goods other than supply (as specified in Rule 55 of CGST Rules, 2017), a delivery challan may be issued. (Source - CBIC FAQs)


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CA Anand Singh

CA Anand Singh

I am a practising Chartered Accountant with 6 years of experience in Direct and Indirect Taxation, FEMA, Corporate Law and Audit etc.