A delivery challan, under rule 55 of the CGST Rules, is issued when goods leave your premises but no tax invoice is due at that moment. Common cases:
- goods sent to a job worker, such as brass rod to a turner or grey cloth to a dyeing house;
- goods sent on approval, where the sale happens only if the buyer keeps them;
- liquid gas where the quantity is not known at dispatch;
- goods moved for reasons other than a sale, such as for repair or exhibition;
- a machine sent in parts across several lots, with the invoice raised on the first.
What it contains
Date and a serial number of up to 16 characters, consignor and consignee details with GSTINs, HSN, description, quantity, taxable value, and tax rate and amount where the movement is for a supply. It is made in three copies: consignee, transporter and consignor.
Why it matters
An e-way bill is still needed when the value crosses ₹50,000, and for goods sent to a job worker in another state it is needed whatever the value. For job work, the challan is the record that inputs must return within one year and capital goods within three. The ITC-04 return is built from these challans, so a business with dozens of job workers needs them in one register, by party and by lot.