Glossary
What is a delivery challan?
What a delivery challan is, when GST asks for one instead of a tax invoice, and what it must show.
Updated
In short
A delivery challan is a document that travels with goods moved without a sale at that moment, such as job work or goods on approval. SimpleERP has no challan document yet; stock moves when the invoice posts.
A delivery challan is a document that goes with goods when they move without a sale at that moment, such as goods sent for job work, on approval, or when the quantity is not known until delivery. Under GST it carries a serial number, date, consignor and consignee details, HSN, quantity and value. It is not a tax invoice and records no sale.
Delivery challan: a worked example
Lakshmi Steel Furnitures sends 30 steel racks to Sri Murugan Traders' showroom on approval. Nothing is sold yet, so the racks travel with a challan like this:
| Field | Entry |
|---|---|
| Challan number and date | DC-0007, 6 Oct 2026 |
| Consignee | Sri Murugan Traders |
| Purpose | Supply on approval |
| Goods | Steel rack 4 shelf, HSN 9403 |
| Quantity | 30 Nos |
| Value | 30 × ₹4,990 = ₹1,49,700 |
Is a delivery challan the same as an e-way bill?
No. A challan is your own document describing the goods. An e-way bill is generated on the government portal when goods above the value limit, usually ₹50,000, move by vehicle. A consignment on a challan may need an e-way bill too, quoting the challan number in place of an invoice number.
FAQ
Questions, answered
When do I need a delivery challan instead of an invoice?
When goods move but no sale happens yet: sending material for job work, goods on approval, goods sent for exhibition, liquid gas where the quantity is fixed only at delivery, or goods transported in parts before the full invoice. For an ordinary sale the tax invoice travels with the goods.
How many copies of a delivery challan are needed?
Under GST rules a challan for goods is made in three copies: the original for the consignee, the duplicate for the transporter and the triplicate kept by the consignor. Mark each copy so it is clear which one is which.
Does a delivery challan reduce my stock?
Physically the goods leave, so your on-hand count falls. In the books the sale and the cost of goods sold are recorded only when the tax invoice is raised, which is why challans and invoices need to be matched so nothing stays out unbilled.
How do I handle goods on approval in SimpleERP?
SimpleERP has no challan, so stock moves only with a posted invoice. Most businesses wait until the customer confirms what they keep and invoice that quantity. If you need to track goods sitting at another location, set it up as a warehouse and use a stock transfer.
Related
Keep reading
E-way bill
The electronic document generated before goods above a set value are moved.
Read moreTax invoice
The document a GST-registered business issues for a taxable sale, with the mandatory GST fields.
Read moreStock transfer
Moving goods between two warehouses of the same business; quantities move, total value and the books stay the same.
Read more
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