A delivery challan is a document that goes with goods when they move. It records what was sent, to whom and in what quantity, but it is not a tax invoice. Knowing when a challan is enough, and how it connects to the invoice, avoids both GST trouble and unbilled deliveries.
Challan and invoice are different documents
A tax invoice charges the customer, carries GST and creates an amount receivable. A delivery challan only records a movement of goods. For a sale of goods, GST generally requires the tax invoice to be issued at or before the time the goods are removed, so a challan does not replace the invoice for an ordinary sale.
When goods generally move on a challan
The GST rules list situations where goods may be moved on a delivery challan instead of a tax invoice. They include, for example:
- Goods sent for job work.
- Goods moved for reasons other than a supply.
- Liquid gas where the quantity is not known at the time of removal.
- Other cases that are notified under the rules.
How businesses use challans day to day
Many businesses also use a challan as the dispatch note for each delivery against an order, and match it to the invoice raised for those goods. Used this way, the important question is whether every challan has been billed exactly once.
- Challan number and date, and the order it delivers against.
- Customer and delivery address.
- Items, quantities and units, and the store and batch they left from.
- Vehicle or transporter details where relevant.
Keep challans and invoices tied together
- Build the invoice from the challans rather than re-typing the lines.
- Make sure each challan is billed once, never twice and never missed.
- Review challans that have not been invoiced every week.
- Leave cancelled challans out of delivered quantities.
General information about GST processes, last reviewed on 8 October 2026. Rules, limits and due dates change by notification; this is not tax advice. Confirm what applies to your business with your tax adviser.
Common questions
Is a delivery challan the same as an invoice?
No. A challan records the movement of goods; it does not charge tax or create an amount the customer owes. Where goods are sold, a tax invoice is still required.