GST and Delivery Challans: What Indian Businesses Need to Know

How GST Changed the Delivery Challan

Before GST, the delivery note or delivery challan was a creature of individual state VAT laws — each state had its own format and rules. The CGST Act, 2017 brought uniformity: Rule 55 of the CGST Rules now prescribes a single national format that every registered supplier must follow when moving goods without a corresponding invoice.

The GST delivery challan is not merely an internal logistics document. It is a statutory record that tax authorities can demand during audits, and it is the foundation for calculating the six-year retention obligation under Section 36 of the CGST Act.

Mandatory Fields Under Rule 55

Every GST-compliant delivery challan must include the following information:

• Challan number: A consecutive serial number, not exceeding sixteen characters, in one or multiple series for a financial year.
• Date of issue
• Consignor details: Name, address, and GSTIN of the supplier dispatching the goods.
• Consignee details: Name, address, and GSTIN of the recipient (if GST-registered).
• HSN code of the goods (2, 4, or 6 digits depending on annual turnover).
• Description and quantity of goods (in number and unit of measurement).
• Taxable value of the goods being transported.
• Applicable GST rate and amount — CGST + SGST, or IGST — even if tax is not being collected at this stage.
• Place of supply (state code and name for inter-state movement).
• Signature of the supplier or their authorised representative.

The challan is to be prepared in triplicate: original for the consignee, duplicate for the transporter, and triplicate retained by the consignor.

When an E-Way Bill Is Also Required

A delivery challan and an e-way bill serve different purposes and are often required together. The e-way bill is an electronic permit generated on the GST portal (ewaybillgst.gov.in) before the commencement of movement. It is required under Rule 138 whenever the consignment value exceeds ₹50,000 for most categories of goods.

In practice, for job-work dispatches, branch transfers, or goods sent for exhibition where the value exceeds ₹50,000, you need both a delivery challan (the statutory document describing the goods) and an e-way bill (the electronic transit permit). The e-way bill number is often noted on the delivery challan for traceability.

Certain categories are exempt from e-way bills even if the value exceeds ₹50,000 — for example, goods transported by non-motorised vehicles, or goods in specified exempted categories notified by the GST Council. Check the latest CBIC notifications for the current exemption list.

Delivery Challan vs the Old Delivery Note

Under the pre-GST regime, state VAT laws prescribed "delivery notes" (also called Form 402 or similar in different states) that tracked inter-state movement for CST purposes. The GST delivery challan replaces all of these with a single nationwide format. Key differences:

• The old delivery note was primarily used to avoid CST on branch transfers; the GST challan covers a broader set of situations including job work.
• The old system was paper-based; the GST challan can be digitally generated and printed.
• HSN codes — not product descriptions alone — are now mandatory.

Record Retention: 72 Months

Under Section 36 of the CGST Act, every registered person must retain all accounts and records — including delivery challans — for 72 months (six years) from the due date of furnishing the annual return for the financial year to which such accounts and records pertain.

If goods or challans are the subject of an appeal, revision, or any other proceeding before any appellate authority or court, the documents must be retained until the proceeding is finally disposed of — even if that extends beyond 72 months.

Practically, this means challans from FY 2023-24 must be kept until at least 31 December 2030 (72 months from the due date of the annual return for FY 2023-24).

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