Goods leave your premises far more often than you sell them. Material goes out for job work, stock moves between your own warehouses, samples go out on approval and a replacement goes out under warranty — and in none of those cases is there an invoice to put in the driver's hand.
The document that travels instead of an invoice
A delivery challan travels with a consignment when there is no tax invoice to send with it. The GST rules name the situations directly: goods sent for job work, goods moved for a reason other than supply, liquid gas where the quantity is not known until delivery, and a few notified cases besides. Goods sent on approval are the other common one — the sale only happens when the customer accepts, so the invoice comes later and the challan goes now.
A challan is not a way to postpone an invoice that is already due. Where a supply has actually happened, the invoice is due at removal of the goods, and sending a challan instead does not buy you time. It just means the consignment is now travelling on the wrong document.
That distinction is why the fields matter. An officer at a check post looking at a consignment with no valid document does not conclude that your paperwork is disorganised. The default reading is an attempted supply without an invoice, and the penalty for that is assessed against the value of the goods on the vehicle rather than the size of the mistake.
What belongs on it
| Field | Why |
|---|---|
| Challan number | So the movement has its own reference, quotable on the invoice later. |
| Date | When the goods left, which is what the e-way bill validity runs from. |
| Consignor | Your name, address and GSTIN — the party the goods are leaving. |
| Consignee | The party receiving them, with GSTIN where they have one. |
| Ship to | The address the vehicle physically goes to, which is often not the above. |
| Order reference | The PO, work order or contract that authorised the despatch. |
| Description | What is in the cartons, line by line, in words a storekeeper recognises. |
| HSN code | Per line, because the e-way bill and any later invoice both need it. |
| Quantity and unit | The number the consignee will count against, with the unit stated. |
| Declared value | For the e-way bill and for insurance. Not a price. |
| Purpose of movement | Job work, stock transfer, approval, warranty replacement, return. |
| Vehicle number | As it appears on the plate, spaced the same way. |
| E-way bill number | In full, matched against what was actually generated. |
| Signature | Consignor's, with a printed name — and space for the consignee's on receipt. |
Three copies is the convention: original for the consignee, duplicate for the transporter, triplicate retained by you. Number them in one unbroken series per despatch location, because a gap looks to an auditor like a despatch somebody removed rather than one that never existed.
If you are laying this out rather than inheriting a format, the free delivery challan template already has these fields positioned. Whatever you build it in, the test is whether a storekeeper can tick every line without turning the page over.
Declared value is not a price
This is the field that gets misunderstood most often, and the misunderstanding runs in both directions.
The declared value exists for two reasons. It lets the e-way bill be raised, because that obligation is triggered by consignment value crossing ₹50,000, and it gives you a number to point at if the truck is in an accident and the goods are lost. It is not an amount anyone owes you. Nothing has been sold.
Understating it to stay under the e-way bill threshold is the version of this mistake that costs money. A consignment of machined components declared at ₹40,000 when the material alone cost ₹1.4 lakh is a consignment moving without an e-way bill it needed, and the value used to compute the penalty will be the real one, not the one you wrote down.
The opposite error is quieter. A challan showing a value that looks like a sale price, with no statement of purpose next to it, will occasionally be booked by the consignee's stores team as a purchase. Then the invoice arrives and the same goods are in their ledger twice.
The fix for both is the same: put the purpose of movement on the face of the document, in a full sentence rather than a single word. "Materials issued for job work under work order WO-2026-0412; goods remain the property of the consignor" tells a reader what is happening. "Delivery" tells them nothing, and leaves the value on the page to speak for itself.
There is no tax breakup on a challan, and there should not be. If a footer line saying this is not a tax invoice feels redundant to you, it is not redundant to the person in accounts payable seeing your document for the first time.
Ship-to answers a different question from consignee
Consignee and ship-to look like the same field until the day they are not, and they are not more often than most templates assume.
The consignee is the legal recipient — the registered entity, at the address on their GSTIN. The ship-to is where the truck goes: a contract warehouse, a third-party logistics facility, a site office, a customer's customer under a bill-to/ship-to arrangement. Collapse the two into one line and you get one of two failures. Either the driver arrives at a first-floor corporate office with forty cartons, or he reaches the correct warehouse holding paperwork that names a different address, and gate security turns the vehicle away because the document does not match the site.
Keeping them separate matters beyond the loading bay. Where you bill one party and ship to another, the place of supply follows the party you bill, not the address the truck reaches. Read it the wrong way round and the invoice carries IGST where CGST plus SGST was due, and the buyer cannot take the credit, because the tax you charged is not the tax their state expects to see.
Write the ship-to line the way a driver reads it. Name the site, not just the company — "Warehouse 3, Gate 2, Stores entrance" — and put a phone number on it.
When the challan and the invoice disagree
This is the failure that surfaces last and costs the most, because it surfaces as silence.
Most buyers of any size run a three-way match. Stores raises a goods receipt note against the quantity written on your challan. Accounts payable then matches your invoice to the purchase order and to that GRN. If the invoice says 500 units and the GRN says 486 — a short shipment, a breakage in transit, two cartons still on the dock — the invoice fails the match and drops into an exception queue.
Nobody calls you. You find out forty-five days later when the payment does not arrive, and by then the person who counted the cartons has forgotten the consignment entirely.
Three habits keep this from happening:
- Invoice what was received, not what was despatched. If the challan quantity and the delivered quantity differ, resolve it before the invoice is raised, or raise the invoice for the received quantity and reference the shortfall.
- Quote every challan number on the invoice. Where several despatches are billed together, list each challan with its date. A buyer who cannot tie your invoice back to the challans their stores signed for will not guess — they will hold the payment and ask.
- Say so when quantities are meant to differ. Job work is the case that catches people. Inputs sent out under challan have to come back within the prescribed period, and the return challan has to reference the outward one. Process loss and scrap retained by the job worker are legitimate, but they have to be written down. A quantity that quietly fails to return is treated as a supply to the job worker, and the tax on it is yours.
The shape of the problem is that the challan is the only record of the physical movement and the invoice is the only record of the money. Every downstream reconciliation — your GST return, their input credit, your auditor's stock count — assumes the two describe the same event. When they do not, nothing throws an error. It just sits there.
Before the vehicle leaves
Four checks, all of them thirty seconds, all of them things that have gone wrong for somebody this week.
Check the vehicle number against the plate, not against the transporter's email. Challans get printed before the truck is loaded, and vehicles change — a transhipment at a hub, a breakdown, a smaller vehicle for the last stretch into the city. Part B of the e-way bill can be updated en route, which is the correct fix; a registration on paper that does not match the one on the road is the discrepancy an inspection finds first.
Read the e-way bill number back digit by digit. A transposition sends whoever is verifying it to a record that does not exist, and the reasonable conclusion is that none was raised at all.
Confirm the challan number is the next in the series, and that it was recorded before the goods moved rather than after.
And make sure whoever collects the acknowledgement takes a printed name and a date alongside the signature. The consignor's signature on your challan proves you sent something. The consignee's, with a name against it, is the only part of the document that proves it arrived.