Move goods. Cover yourself.

What is a delivery note (and a delivery challan), and why does it matter?

A delivery note — called a delivery challan in India — is a document that travels with goods when they move from the seller to the buyer. It lists exactly what is being shipped, in what quantity, from where, to where, by which vehicle, and on what date. It is not an invoice and it does not create a payment obligation. Its purpose is purely operational: to prove that goods were dispatched and received, and to track every movement in a way tax authorities and your own warehouse team can audit.

In India, the GST regime requires a delivery challan for certain non-invoice goods movements — like sending material to a job-worker, transferring stock between your own branches, or shipping samples. In those cases, no GST invoice is raised yet, but a challan is mandatory and must be carried with the goods (along with an e-way bill above ₹50,000 value). For B2B businesses everywhere — not just India — sending a delivery note alongside shipments protects you when invoices are queried later ("but you never delivered the items") and protects the buyer when they pay ("the box arrived with 8 units, not the 10 you billed for").

When to use a delivery note

• Stock transfer between branches. Moving inventory from your Delhi warehouse to your Bangalore branch — no sale, no GST, but a challan is mandatory.
• Job-work shipments. Sending raw fabric to a tailor for stitching, or raw metal to a fabricator. Material moves with a challan, returns with another.
• Goods sent on approval or sale-on-return basis. Sample shipments, consignment stock. No invoice until the buyer confirms acceptance.
• Pre-invoice deliveries. Sometimes goods ship before billing happens (month-end logistics). A challan covers the dispatch, then the invoice follows.
• Returns and replacements. Customer returns defective goods to you — you raise a delivery note for the return, not an invoice.
• Exhibition or demo dispatches. Equipment moving to a trade show for display.

What to include on a delivery note

1. Challan/delivery note number — unique serial (e.g., DC-2026-0117) referenced on any subsequent invoice
2. Date of dispatch — the day goods actually leave your premises
3. Consignor (seller) details — your business name, address, GSTIN
4. Consignee (buyer) details — recipient name, ship-to address, GSTIN if applicable
5. Description of goods — itemized list with HSN code (India), description, unit, quantity, and unit price (optional but recommended for valuation)
6. Total value — for transport documentation, even if no money changes hands. This decides if you need an e-way bill (above ₹50,000 in India)
7. Transport details — vehicle number, driver name, transporter ID. For cross-border movement, also the LR (Lorry Receipt) number
8. Place of delivery — full address where goods will be received
9. Two signatures — one from the dispatching authority (your side), one from the receiving party (the buyer or transporter)
10. Reference to PO or invoice — if the goods relate to a specific purchase order or future invoice, note the number

Common delivery note mistakes

• Treating it as an invoice. A delivery note does not transfer ownership of goods or create payment liability. Tax authorities reject claims based on challans alone — you still need a proper invoice for revenue recognition.
• Skipping the e-way bill (India). If goods worth more than ₹50,000 are moving, the e-way bill is mandatory along with the challan. Driving without it can mean detention and fines.
• Missing vehicle/transporter details. If goods are intercepted en route, the officer needs to verify the vehicle matches. Always print the lorry number on the challan.
• No buyer signature on the copy that returns.Always have the recipient sign on receipt and keep a counter-signed copy. Without it, you have no proof of delivery if there's a dispute later.
• Forgetting to link to the future invoice. Once you raise the invoice, write its number on your retained copy of the challan, so the audit trail connects in both directions.

From delivery to invoice

Once the goods are delivered and the buyer signs, the next step is raising the invoice with the same line items, this time including the GST/VAT breakdown and payment terms. Reference the challan number on the invoice ("Against DC-2026-0117") so your buyer's finance team can match the two documents instantly. For internal stock transfers between your own GSTINs, the invoice step is replaced by a tax invoice or self-billing — check with your CA. Need to raise that invoice? Use our free invoice generator to issue one with the matching line items.