Delivery Challan plays a significant role in maintaining smooth and transparent Logistics. without the delivery challan businesses may face different challenges, for example, disputes of received goods, mismanagement in the delivery process, delays in the supply, and so on. This study aims to discuss the importance of delivery challan along with its format. The study also discusses different types of delivery challan, the time of issuing delivery challan, the process for issuing delivery challan, and GST rules on delivery challan.
Main Body
Role of delivery challan in business
In business process delivery challan plays a significant role by allowing their customers to identify their consignment. The delivery challan helps business organizations to maintain their business process transparently by mentioning the number of goods, price, GST rate, date of transportation along with delivery location, and total cost of the transportation process. On the other hand delivery challan is also important in supply chain management, where it is referred to as evidence of legal movements of goods (Phillip et al. 2023). Therefore, delivery challan can be used to facilitate the movement of goods, keep a record of the return of goods, and provide support in inventory management. not only use the delivery challan for good transportation after the order is placed, return or replacement of goods, as well as it helps the business organization by providing raw materials and finished good transportations.
Classifications of Delivery challan
Delivery challan is divided into two categories: outward delivery challan and inward delivery challan. The outward delivery challan mainly provides information to the sales authorities regarding the number of the items, details of the senders, information regarding the sending location, and types of the items whether they are breakable or not (Anika, 2022). The outward channel is mainly utilized for job work and subcontracting purposes (Vyaparapp, 2024). Whereas, inward challan generally maintains records of all the received materials as well as they sent for the jobs and raw materials.
Time of issuing of delivery challan
Delivery challan of an issue under specific criteria. at the time of issuing delivery challan, According to 55(1) of the CGST Act, the sender can issue a delivery charge instead of an invoice in the case of:
- Delivery challan can be issued when the sender needs to calculate the number of the products.
- When the senders do not know the quantity of the goods.
- When the recipient of the goods is unaware regard the location of the suppliers.
- When the goods are shipped for sale or return.
- When the goods are shipped not for supply.
- While the vendors cannot provide the tax invoice (Choudhary et al. 2024).
- When it became mandatory to issue delivery challan other than tax invoices because of the rule of the Central Board of Exercise and Customs.
However, it is important to mention that the sender needs to develop an invoice for the products after delivering them to the recipient by using a delivery challan.
Process for issuing delivery challan & GST rules on delivery challan
At the time of issue in the delivery challan the sender needs to follow the concern CGST rules properly. it is important to say the delivery challan in three copies why following the rule of Section 55(2), CGST rules. according to this regulation, it is important to develop three copies of the GST delivery challan but sometimes it requires a fourth copy. purpose of the fourth copy is stated below:
- The sales division generally receives the second copy.
- Whereas, the accounting department required the first copy (Garg, S. and Kumar, 2020).
- The third copy is generally sent to the purchaser.
- The final and 4th copy is generally kept for maintaining the record.
By following the GST Act of section 31, it is essential to provide a tax invoice, when a registered taxpayer organization trying to transport goods from one place to another. This types of tax and voice generally consist of different information regarding the value of the invoice, detailed description of the product, quantities, Price, amount, and what kind of GST applies to them.
Therefore in some situations, the transportation process does not require sales, so they do not develop any tax invoice. In this kind of situation, the center generally develops and generates delivery challan. On the contrary, business organizations also can issue any document which is known as a returnable challan there mainly used when goods are not sold but loaned (Chandravanshi et al. 2021). Generally registered organizations need to retain and maintain the books of account that mainly consist retaining of delivery challan for 72 months and need to submit them for the relevant year by following section 36 of the CGST Act.
Differences in delivery challan and tax invoice
| Delivery Challan | Tax Invoice |
|---|---|
| Delivery challan do not need to include GST documentation | tax invoice is a documentation of ownership and legal process |
| This kind of document may or may not lead sale | This kinds of documentation generally explain the sales transaction |
| The delivery challan cannot be used as a tax credit claim | The tax invoice can be used as input test tax credit claim |
Table 1: Difference of delivery challan and tax invoice
(Source: Created by the author)
Formate of Delivery challan
The study mainly explains the format of the delivery challan, which is the following:
- Need to put the name address and GSTIN of the sender.
- HSN code
- Name address and GSTIN of the receiver.
- Quantity and rate of the product in figures and words.
- A detailed description of the goods.
- Signature of the supplier.
- Serial number of the challan document.
- Location of the supply.
- Signature of the supplier.
- Appropriate Tax amount if required.
Conclusion
The above study mainly discussed the importance of delivery challan in the business along with its format. Also, the study discusses the differences between the taxi invoice and delivery challan.
FAQ’s
- what is delivery challan?
A delivery challan is a document that mainly consists of a detailed description of the product as well as financial transactions.
- What is the important format of the delivery challan?
In the delivery challan, it is important to include the name of the sender and receiver, important to mention the GSTIN if registered along with HSN.
- How many copies of the delivery challan needed to be developed?
Generally 3 but sometimes 4.
- Why was the delivery challan issued?
The delivery challenge is generally issued when the product is not specific or completed.
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