Delivery Challan Format: When You Need One and a Sample (2026)

Not every movement of goods is a sale. Stock shifts between your branches, materials go out for job work, and items travel on approval before the customer decides. In all of these the goods move but no invoice is raised at that moment, and moving goods without any document is a mistake. The correct paper for these journeys is the delivery challan. It records what is being sent and to whom, proves the movement is genuine, and gives the receiver something to check the delivery against. This guide explains what a delivery challan is, when to use one instead of an invoice, the fields it must carry under GST, and a sample layout you can copy.

What a delivery challan is

A delivery challan is a document that travels with goods when they are moved. It lists the items, the quantity, the parties involved, and the reason for the movement. The word challan simply means a note or voucher that accompanies something, and here it accompanies goods on the road. Unlike an invoice, it is not primarily a demand for payment. Its job is to show that the goods leaving your premises are accounted for, so the transporter, the receiver and, if asked, the authorities can all see what is being carried and why. When the movement is finally billed as a sale, a separate tax invoice is raised.

When to use a challan instead of an invoice

The rule of thumb is simple: if goods move but you are not billing a sale at that instant, a delivery challan is the right document. The common cases are:

• Stock transfer: moving goods between your own branches or warehouses, where no sale happens.
• Job work: sending raw materials or semi-finished goods to another party for processing, then receiving them back.
• Goods on approval: delivering items a customer may or may not buy, where the sale is not yet confirmed.
• Value not yet known: moving goods where the final billable amount cannot be fixed at dispatch.
• Repairs and returns: sending equipment out for repair, or returning goods to a supplier.

In a straightforward sale, you do not need a challan at all, because the tax invoice itself accompanies the goods. The challan fills the gap for every movement that is not a billed sale.

The fields a challan must carry under GST

GST rules set out what a delivery challan should contain so the movement is properly documented. Include these details:

• Title and serial number: marked Delivery Challan with a running serial number.
• Date of challan: the date the goods are dispatched.
• Consignor details: the sender's name, address and GSTIN.
• Consignee details: the receiver's name, address and GSTIN where registered.
• Reason for movement: such as stock transfer, job work or goods on approval.
• Item description: each item with HSN code, quantity and unit.
• Value of goods: the value shown for reference, even though no sale is billed.
• Place of supply and signature: the destination and an authorised signature.

Depending on the value and the distance, the movement may also need an e-way bill alongside the challan. Those thresholds are updated over time, so confirm the current requirement with your accountant before you dispatch.

A sample delivery challan format

Here is a sample layout for a delivery challan covering a stock transfer between two branches of the same business. No sale is being billed, so the value is shown only for reference:

When the goods reach the Thane branch, the receiver checks the 60 units against the challan. Because both branches share the same GSTIN, this is a movement, not a sale, so no tax invoice is raised for it.

Delivery challan versus invoice

The two documents look similar but do different jobs. Confusing them is what gets movements documented wrongly:

The clean way to think about it: the challan moves the goods, the invoice moves the money. For goods sent on a challan and later sold, you raise a proper invoice at that point, covered in our invoice maker app guide.

Common challan mistakes

A few slips turn a routine dispatch into a compliance problem, and all of them are easy to avoid:

• No challan at all: moving goods with nothing on paper is the biggest risk. Every non-sale movement needs a document.
• Missing the reason: a challan that does not state why the goods are moving is hard to justify. Always name the reason, such as job work.
• Skipping the e-way bill: where the value or distance requires it, the challan alone is not enough. Check the threshold before dispatch.
• Loose numbering: a broken serial series makes it impossible to reconcile the challan against the later invoice or the returned goods.

Raising challans without the paperwork

Writing challans by hand invites all of the mistakes above, because the numbering drifts and the fields get skipped when someone is in a hurry. An app that handles dispatch keeps the challan series clean, carries the consignor and consignee details across without retyping, and links the challan to the invoice that is finally raised, so a stock transfer or a job-work movement can be tracked from dispatch to billing. That link matters most for job work, where you need to know that everything you sent out has come back or been billed. For how your stock moves as goods leave and return, see the feature list.

The bottom line

A delivery challan is the right document whenever goods move without a sale being billed, such as a stock transfer, job work or goods on approval. Carry the GST fields, state the reason, keep the numbering clean, and add an e-way bill where the movement needs one. IndiaCRM raises delivery challans and links them to the invoice you finally bill, in one free app. See GST billing software, browse the features, or get the mobile app and raise your first challan today.