A tax invoice and a delivery challan are easy to confuse — both list goods, quantities and parties. But under GST they do different jobs, and using the wrong one can cause problems during transport or filing.
What is a tax invoice?
A tax invoice is the document that records a sale. It establishes the value of the supply, charges GST (CGST/SGST or IGST), and is the basis for your output tax and the buyer’s input tax credit. You issue it when ownership of the goods or services transfers and payment is due.
What is a delivery challan?
A delivery challan accompanies goods that are moving without an immediate sale — so it generally does not charge GST as a sale. Common cases include:
- Sending goods on approval or “sale or return”
- Moving stock between your own branches or to a job worker
- Transporting goods where the quantity is not yet known at dispatch
- Exhibitions, repairs, or returns
Quick rule of thumb
If the transaction is a sale and GST applies now, raise a tax invoice. If goods are simply moving and the sale has not happened (or will be billed later), use a delivery challan. With GSTify you can issue either in a couple of taps, with its own number series, and convert a challan into an invoice when the sale is confirmed.
Issue compliant invoices and delivery challans from your phone — download GSTify free.