Delivery challan

A delivery challan lets you move goods out before raising a tax invoice, exactly as allowed by GST Rule 55. It is not a sale: it carries no tax, posts nothing to your accounts, and stays out of your sales, turnover and GSTR-1.

When to use it

Use a challan whenever goods leave your premises but the supply isn't complete:

• Job work — sending material to a job worker.
• Approval / sale-or-return — goods a customer may buy or return.
• Stock transfer — moving stock to another branch.
• Exhibition / fair — goods taken out to display and sell.
• Other — any movement "other than by way of supply".

Creating a challan

It works just like Create Bill, so there's nothing new to learn:

• Consignee — search an existing customer and their GSTIN, address and state auto-fill; or type a new one. Name and state (place of supply) are required; a GSTIN, if entered, is validated.
• Purpose — pick the Rule 55 reason from a dropdown.
• Place of supply — a searchable state dropdown, defaulting to your own state (change it if the goods go interstate).
• Items — the same desktop line-item table as billing, with per-line discount. GST is shown for information only — no tax is charged.
• Batches — for batch-tracked items, record which lots went out. This is the useful part: those exact batches carry to the invoice on convert, so you never re-pick them.
• Date — respects your GST period lock, just like a bill, so you can't back-date a challan into a filed period.

The challan number lives in its own DC- series (shop- and FY-aware, like your invoice series) and is editable.

Convert to invoice

When the supply concludes, open the challan and tap Convert to Invoice. The Create Bill screen opens with everything pre-filled — customer, items, rates, discounts and the exact batches — so you just choose the payment type and save. Stock is deducted once, at the invoice — the challan itself moves no stock, so there's no double counting.

Once converted, the challan shows an "Invoiced" badge linking to the invoice.

Cancelling

An open challan can be cancelled — it's marked cancelled and stays on record (the number is never reused). If you cancel the invoice a challan was converted into, the challan automatically re-opens so you can raise a fresh invoice from it.

Why it stays out of GST

Because a challan is not a supply, it never touches your tax reports — your GSTR-1, GST summary and turnover only ever reflect actual invoices. This keeps your returns correct: tax applies exactly once, when you raise the invoice.

A delivery challan is a paid feature. If you don't see it, enable Delivery Challan on your subscription.