---
title: "What is a Delivery Challan? Format, When to Issue, and GST Rules 2026"
description: "A delivery challan is used when goods move without a sale — for job work, exhibitions, approvals, or branch transfers. Here is the complete guide with format and GST rules."
author: "Himanshu"
published: 2026-03-25T07:51:53.000Z
updated: 2026-09-06T05:39:16.564Z
url: https://blog.mybillplease.com/what-is-delivery-challan
---
# What is a Delivery Challan? Format, When to Issue, and GST Rules 2026

## Key takeaways

- A delivery challan under Rule 55 documents goods moving without a sale: job work, approval, exhibitions, branch transfers, samples.
- No GST is charged on a challan, but an e-way bill is still mandatory when consignment value exceeds Rs 50,000.
- Job work goods must return within 1 year (3 years for capital goods) or the principal must issue a tax invoice and pay GST with interest.
- Challans need their own number series and the same mandatory fields as invoices: HSN, quantity, value, place of supply, signature.

## What is a Delivery Challan Under GST?

A delivery challan is a document issued when goods are transported for reasons other than a sale. Unlike a [tax invoice](/gst-invoice-format-guide) which records a taxable supply, a delivery challan records the movement of goods where no immediate sale takes place — such as sending goods for job work, taking products to an exhibition, shipping goods on approval, or transferring stock between your own branches.

Under GST, a delivery challan is specifically covered under Rule 55 of the CGST Rules. It is legally required for certain types of goods movements. Transporting goods without proper documentation — either an invoice or a delivery challan — can lead to detention at checkpoints and penalties under Section 129. If the goods value exceeds Rs 50,000, you also need an [e-way bill](/e-way-bill-guide) along with the delivery challan.

We support delivery challans as one of the 8 document types in [myBillPlease](https://www.mybillplease.com/signup). Create challans with proper format, track goods sent and received, and maintain a complete trail for GST compliance. Download a [free delivery challan format template](https://www.mybillplease.com/tools/delivery-challan-format) to see the structure, or use our [GST calculator](https://www.mybillplease.com/tools/gst-calculator) for any tax-related calculations.

This guide covers when to issue a delivery challan, the mandatory format, GST implications, and the difference between delivery challans and other documents.

## When to Issue a Delivery Challan (Not a Tax Invoice)
Rule 55 of CGST Rules specifies these situations
- Goods sent for job work — raw materials or semi-finished goods sent to a job worker for processing
- Goods returned from job work — finished or processed goods returned from the job worker
- Goods sent for approval or on sale-or-return basis — customer examines goods before deciding to buy
- Goods sent to exhibitions or trade fairs — display goods that may or may not be sold at the event
- Branch transfer or stock transfer — moving goods between your own warehouses or branches in the same state
- Goods sent as free samples — promotional goods given to potential customers for evaluation
- Liquid gas transported through pipeline — specific provision for continuous supply
- Semi-knocked down or completely knocked down goods — goods shipped in parts for assembly at destination

## Delivery Challan vs Tax Invoice vs Bill of Supply
Three documents for three different situations
| Delivery Challan | Tax Invoice | Bill of Supply |
| --- | --- | --- |
| Purpose | Goods movement without sale | Taxable sale of goods/services | Exempt or composition supply |
| GST charged | No — not a sale | Yes — CGST+SGST or IGST | No — exempt or composition |
| ITC available to receiver | No — not a purchase | Yes — ITC claimable | No |
| Reported in GSTR-1 | No | Yes — Tables 4/5/7 | No |
| GST rule | Rule 55 CGST Rules | Section 31 CGST Act | Section 31(3)(c) |
| E-way bill needed | Yes — if value > Rs 50,000 | Yes — if value > Rs 50,000 | Yes — if value > Rs 50,000 |
| Common use | Job work, exhibitions, approvals | Regular B2B and B2C sales | Composition dealers, exempt goods |
| Number series | Separate challan series (DC-001) | Invoice series (INV-001) | Bill series (BOS-001) |

## Delivery Challan Format: Mandatory Fields

Rule 55(1) of CGST Rules prescribes the following fields for a delivery challan:

**1. Date and number:** Sequential challan number in a separate series from invoices. Date of issue.

**2. Sender details:** Name, address, and GSTIN of the consignor (person sending the goods).

**3. Receiver details:** Name, address, and GSTIN (if registered) of the consignee (person receiving the goods).

**4. HSN code:** [HSN code](https://www.mybillplease.com/hsn) for each item being transported. Same requirement as invoices — 4 or 6 digits based on turnover.

**5. Description of goods:** Clear identification of what is being transported.

**6. Quantity:** Number of units, weight, or other measurement.

**7. Taxable value:** Even though no tax is charged, the value of goods must be declared. This is important for e-way bill generation if the value exceeds Rs 50,000.

**8. Tax rate and amount:** If GST is applicable (rare for challans), show the tax. For most challan scenarios, this is zero or marked as N/A.

**9. Place of supply:** State where goods are being delivered.

**10. Signature:** Authorised signatory of the sender.

Download our [free delivery challan format template](https://www.mybillplease.com/tools/delivery-challan-format) with all fields pre-configured. In [myBillPlease](https://www.mybillplease.com/signup), select Delivery Challan as document type — all mandatory fields are included with auto-numbering.

## Delivery Challan for Job Work — Special Rules

Job work is the most common reason for issuing delivery challans. When you send raw materials to a job worker for processing (like sending fabric to a tailor or metal to a fabricator), a delivery challan documents the movement.

> **Time limit for return**
> 
> Goods sent for job work must be returned within 1 year from the date of sending (3 years for capital goods). If not returned within this period, the sender must issue a tax invoice and pay GST as if the goods were sold. This is a critical compliance point: track all open challans and ensure timely return.

**ITC-04 filing:** If you send goods for job work, you must file ITC-04 quarterly (or annually for turnover up to Rs 5 crore). This return reports all goods sent, received back, and any direct supply from the job worker's premises. The delivery challan details feed into ITC-04.

**Supply from job worker's premises:** If the finished goods are supplied directly from the job worker's location to your customer, you issue the tax invoice but the delivery challan (and e-way bill) shows the job worker's address as the dispatch point.

myBillPlease tracks delivery challans with job work status — sent, in progress, returned. You can see all open challans approaching the 1-year deadline and take action before the time limit expires. This prevents unexpected tax liability from unreturned job work goods.

> **Delivery Challan and E-Way Bill: Key Points**
> 
> When goods move with a delivery challan and the consignment value exceeds Rs 50,000, an [e-way bill](/e-way-bill-guide) is mandatory — even though it is not a sale.
> 
> **Document type on e-way bill:** Select 'Delivery Challan' as the document type when generating the e-way bill. Enter the challan number and date — not an invoice number.
> 
> **Supply type:** For job work, select 'Others' as supply type with the sub-type 'For Job Work'. For exhibitions, select 'Others — For Exhibition'. This classification matters for correct e-way bill generation.
> 
> **Validity:** E-way bill validity for delivery challans follows the same distance-based rules as invoices — 1 day for up to 200 km, 3 days for 200-400 km, etc.
> 
> **Return journey:** When goods return from job work or exhibition, a new delivery challan and a new e-way bill are needed for the return journey. The original challan covers only the outward movement.

**Create Delivery Challans — Free**
All 8 GST document types supported. Auto-numbering, HSN codes, PDF sharing. Free plan with no limits.

[Get Started Free](/signup)

## FAQ

### What is a delivery challan in GST?

A delivery challan is a document issued under Rule 55 of the CGST Rules when goods are transported for reasons other than a sale. It records the movement of goods for job work, exhibitions, approvals, branch transfers, or free samples. Unlike a tax invoice, no GST is charged on a delivery challan because no taxable supply occurs. The challan must include sender and receiver details, HSN codes, description, quantity, and value of goods. It serves as proof of legitimate goods movement during transit checks and is required alongside an e-way bill when the goods value exceeds Rs 50,000.

### When should I issue a delivery challan instead of a tax invoice?

Issue a delivery challan when goods are moving but no sale is happening. Common scenarios include sending raw materials to a job worker for processing, taking products to an exhibition or trade fair, shipping goods to a customer on approval or sale-or-return basis, transferring stock between your own branches in the same state, and sending free samples. Issue a tax invoice only when a taxable supply occurs — meaning when you are selling the goods. If you issue a tax invoice when you should have issued a challan, you create unnecessary tax liability and the buyer may wrongly claim input tax credit.

### Is GST charged on a delivery challan?

Generally no. A delivery challan documents goods movement without a sale, so no GST is charged. However, there are exceptions. If goods sent on approval are accepted by the customer (and become a sale), you must issue a tax invoice within 6 months. If goods sent for job work are not returned within 1 year (3 years for capital goods), you must treat it as a deemed supply and issue a tax invoice with GST. In these cases, the original delivery challan is supplemented by a tax invoice when the taxable event occurs.

### Do I need an e-way bill with a delivery challan?

Yes, if the consignment value exceeds Rs 50,000. The e-way bill requirement under Rule 138 applies to all movement of goods regardless of whether the document is a tax invoice, delivery challan, or bill of supply. When generating the e-way bill, select Delivery Challan as the document type and enter the challan number. For job work goods, select the appropriate sub-type. The e-way bill validity follows the same distance-based rules as for sale transactions. Exemptions like non-motorised transport and exempt goods also apply to challan movements.

### What is the time limit for returning goods sent on delivery challan for job work?

Goods sent for job work on a delivery challan must be returned to the principal within 1 year from the date of sending. For capital goods sent for job work, the time limit is 3 years. If the goods are not returned within these time limits, the principal is deemed to have supplied the goods to the job worker on the date the time limit expires. The principal must then issue a tax invoice, pay GST with interest from the due date, and report it in GSTR-1. Tracking delivery challan timelines is critical to avoid this unexpected tax liability.

### How do I create a delivery challan in myBillPlease?

In myBillPlease, go to Documents and click New. Select Delivery Challan as the document type. Enter the receiver details, add items with HSN codes and quantities, and specify the reason for movement such as job work, exhibition, or approval. The challan gets an auto-incrementing number in a separate series from your invoices. Save and share via PDF email or WhatsApp. myBillPlease tracks all open challans so you can monitor goods sent for job work and ensure timely return within the 1-year limit. The free plan supports all 8 document types including delivery challans.

### Can a delivery challan be converted to a tax invoice?

Yes, in specific situations. When goods sent on approval are accepted by the customer, you issue a tax invoice referencing the original delivery challan number. When goods sent for exhibition are sold at the event, you issue a tax invoice for the sold items. In myBillPlease, you can convert a delivery challan to an invoice similar to converting a proforma or quotation — select the challan, click Convert, and the item details transfer to a new tax invoice. The challan is marked as converted and linked to the resulting invoice for audit trail purposes.