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Dilemma of tax invoice & delivery challan under GST?

Going through the present article one would come to know some of the provisions relating to tax invoice as well as provisions relating to delivery challan as prevailing under the GST law. The article also figures out the difference between tax invoice and delivery challan.

Provisions relating to tax invoice [Section 31 of the CGST Act]-

Under Goods and Services Tax (GST), a tax invoice is an important document. In common parlance, the tax invoice is a primary document for-

• It evidences the supply of goods or services; and
• It is vital for availing input tax credit.

A registered person supplying goods or services or both is mandatorily required to issue a tax invoice. The time of issuance of tax invoice depends on the nature of supply i.e., whether it is the supply of goods or supply of services.

Format of tax invoice-

Rule 46 of the Central Goods and Services Tax Rules, 2017 summarizes the particulars/ details to be provided in the tax invoice. The same is listed hereunder-

• Details of supplier-
  • Name,
  • Address, and
  • GSTIN.
• Invoice number (Notably, it should be a consecutive serial number. The number should not exceed 16 characters. Also, the number should be a combination of alphabets, numerals, special characters and slash symbols).
• Date of the invoice.
• Details of the recipient-
  • Name,
  • Address,
  • GSTIN or Unique Identity Number (in case of registered recipient),
  • Address of delivery, name of State and State code (in case of the unregistered recipient and taxable value of supply is INR 50,000 or more).
• Details of goods/ services like-
  • Harmonized System of Nomenclature (i.e., HSN) code,
  • Description of goods/ services,
  • Quantity (in case of a supply of goods), and
  • Total value.
• Tax details like-
  • Rate of tax (bifurcated into central tax, state tax, integrated tax, Union territory tax or cess),
  • Amount of tax (this should also be bifurcated into central tax, state tax, integrated tax, Union territory tax or cess).
• Place of supply and State name, in case of inter-state supply.
• Quick Response (QR code), wherever applicable.
• Signature/ digital signature of the supplier.

As per rule 48, the tax invoice should be prepared in the following manner-

In case of a supply of goods	In case of a supply of services
Tax invoice is to be prepared in triplicate (i.e., three copies) as follows- Original copy marked as ‘Original for Recipient’, Duplicate copy marked as ‘Duplicate for Transporter’, and Triplicate copy marked as ‘Triplicate for Supplier’.	Tax invoice is to be prepared in duplicate (i.e., two copies) as follows- Original copy marked as ‘Original for Recipient’, and Duplicate copy marked as ‘Duplicate for Supplier’.

Provisions relating to delivery challan [Rule 55 of the CGST Rules]-

Specified transportation of goods is allowed without the issue of an invoice (i.e., tax invoice). When there is the transportation of such specified goods, the consigner (sender) will issue a delivery challan instead of a tax invoice.

Conditions where challan can be issued in lieu of invoice-

Rule 55(1) of the Central Goods and Services Tax Rules, 2017 covers the list of specified goods that can be transported on the basis of delivery challan in lieu of invoice. The same is summarized hereunder-

1) Transportation of goods for the purpose of job-work.

Where goods are being sent by Principal to job-worker, from job worker to Principal and from one job worker to another job-worker.

2) Transportation of goods for any reasons other than by way of supply

Internal movement of goods by supplier: Transportation of goods from one warehouse to another warehouse of the supplier within the same state.

Sending Goods Outside India for Exhibition or for Export Promotion: Circular No. 108/2019 dated 18.07.2019 stats that if the goods are being transported out of India for an exhibition or on a consignment basis. Then these types of exports are neither ‘supply’ nor ‘export’. Therefore no requirement of LUT & bond in those cases. Rather removal of goods can be made under delivery challan.

Goods being transported/ supplied on approval: Where the goods being sent or taken (within state or outside state) on approval for sale or return basis and are removed before the supply takes place, Delivery Challan can be issued at the time of removal of goods.

3) supply of liquid gas where the quantity at the time of removal from the place of business of the supplier is not known 

4) Transportation/ shipping of goods in a semi-assembled state.

Where the goods are being transported in a semi knocked down or completely knocked down condition or in batches or lots -

(a) the supplier shall issue the complete invoice before dispatch of the first consignment;

(b) the supplier shall issue a delivery challan for each of the subsequent consignments, giving reference of the invoice;

(c) each consignment shall be accompanied by copies of the corresponding delivery challan along with a duly certified copy of the invoice; and

(d) the original copy of the invoice shall be sent along with the last consignment.

5) Tax invoice could not be issued at the time of removal 

Where the goods being transported are for the purpose of supply to the recipient but the tax invoice could not be issued at the time of removal of goods, the supplier can issue a delivery challan at the time of removal of goods and thereafter will issue a tax invoice post delivery of goods.

Format of delivery challan-

As per rule 55(1), the delivery challan should contain the following particulars-

• Date of the delivery challan,
• Number of the delivery challan (notably, it should be serially numbered and the number should not exceed 16 characters),
• Following details of the consigner-
  • Name;
  • Address; and
  • Goods and Services Tax Identification Number (GSTIN).
• Following details of the consignee-
  • Name;
  • Address; and
  • Goods and Services Tax Identification Number/ Unique Identification Number.
• Following details of goods-
  • HSN code;
  • Description of goods;
  • Quantity (in case exact quantity is not known, mention provisional quantity);
  • Taxable value.
• GST rate and bifurcated tax amount (i.e. separate amount of IGST, CGST, SGST and cess),
• Place of supply (in case of inter-state movement),
• Signature.

As per rule 55(2), the delivery challan should be prepared in three copies (triplicate) in the following manner-

• Original copy marked as ‘Original for Consignee’,
• Duplicate copy marked as ‘Duplicate for transporter’, and
• Triplicate copy marked as ‘Triplicate for Consignor’.

Understanding basic difference between tax invoice and delivery challan-

The following table summarizes the basic difference between tax invoice and delivery challan-

Particulars	Tax invoice	Delivery challan
Meaning	In general terms, a tax invoice is a bill reflecting a sale transaction. It reflects the amount to be paid by the buyer.	A delivery challan just acknowledges that the goods are sent by the sender and received/ accepted by the customer/ buyer.
Transfer of ownership of goods	Issuance of tax invoice means the ownership of goods is transferred.	Issuance of delivery challan doesn’t transfer the ownership.
Availment of Input Tax Credit	Receiver can avail input tax credit on the basis of tax invoice.	Availment of input tax credit on the basis of delivery challan is not possible.
Supply of goods or services	A tax invoice is applicable in case of a supply of both taxable goods or taxable services.	Delivery challan is applicable only in the case of a supply of goods.
Issuance of further document	Once the tax invoice is issued there is no need to issue any further documents.	In case the goods are supplied on the basis of delivery challan and such goods are supplied/ transported for the purpose of supply (sale). Then, the supplier is required to issue a tax invoice after the delivery of such goods.

 

Very nice article

what is the kind of dillema between tax invoice and delivery challan

Replied to Sandeep jain

Which date should be shown on the invoice generated after 4-5 days after the supply made earlier under a delivery challan

i am subscriber to gst library .
please provide option to download articles in pdf format.

Replied to m-murali

You can save the article in PDF format by using the printer symbol appearing on the right corner above the title .

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