Delivery Challan: Format, Uses and How to Make One

A delivery challan is a document that travels with goods to record what was dispatched, to whom and in what quantity. It is proof of delivery, not a bill: the customer signs it on receipt, and the invoice follows or travels with it. Wholesalers use a delivery challan whenever goods leave the warehouse before billing, move between branches, or go out on sale-or-return.

Below you will find the delivery challan format fields that matter, how a challan differs from an invoice and a gate pass, and a simple workflow for issuing one from each order. If you want challans, invoices and stock to come from one order record, you can try WholeStock free on WordPress.org.

What is a delivery challan?

A delivery challan is a dispatch note listing the goods, quantities and parties in a consignment, signed by the receiver as acknowledgement. It records the physical movement of stock, while the invoice records the money owed.

The word “challan” is common in South Asian trade, but the document exists everywhere. In the US and UK the same paper is usually called a delivery note or packing slip. The idea is identical: one sheet that the driver carries, the customer signs, and you file as proof.

When do wholesalers need a delivery challan?

You need a delivery challan whenever goods move without a final invoice, or when the receiver must sign for what arrived. For a typical distributor that means:

• Credit customers: goods go out today, the invoice is settled over weeks, and the signed challan proves delivery if a dispute about dues comes up.
• Branch and warehouse transfers: stock moves from your main godown to a second branch. Nothing is sold, but the movement needs a record.
• Sale or return: a retailer takes 20 cartons on trial and returns what does not sell.
• Job work: goods sent out for packing, labelling or repair and expected back.
• Unknown final quantity: bulk goods where the exact quantity is confirmed only on delivery.

In India, Rule 55 of the CGST Rules lists the cases where a delivery challan may be issued in place of a tax invoice, including job work, unknown quantity and movement for reasons other than supply (Rule 55 text).

What should a delivery challan format include?

A good delivery challan format identifies the parties, the goods, the quantities in the unit actually shipped, and a signature line. Everything else is optional unless your tax rules require it.

Field	Why it matters
Challan number and date	Lets you match the challan to an order, invoice and stock movement
Sender and receiver details	Name, address and phone, plus tax IDs where required
Item description and code	Avoids “which oil?” arguments at the customer’s door
Quantity and unit	Write “18 cartons (432 packs)”, not just “432”
Batch or lot reference	Traces a complaint back to the shipment it came from
Vehicle and driver	Needed when the goods pass a gate or checkpoint
Receiver’s signature and stamp	Your proof of delivery if dues are disputed

For GST-registered businesses in India, Rule 55 also requires the HSN code, consignor and consignee GSTIN, place of supply for inter-state moves, a serial number of up to 16 characters, and three copies marked for consignee, transporter and consigner (ClearTax summary). Check your local tax rules before relying on any template.

Delivery challan vs invoice vs gate pass: what’s the difference?

An invoice asks for payment, a delivery challan proves what was delivered, and a gate pass authorizes goods or a vehicle to leave your premises. Most wholesale dispatches need all three, and the mistakes happen when they are written separately by hand.

	Delivery challan	Invoice	Gate pass
Purpose	Proof of what was dispatched and received	Request for payment	Permission to exit the warehouse
Shows prices?	Optional	Yes	No
Who keeps it	Customer signs; you file a copy	Customer and your accounts	Gate or security staff
When issued	At dispatch	At or after dispatch	At the gate

What does a missing or wrong challan cost a wholesaler?

A missing or wrong delivery challan turns every disagreement into your word against the customer’s. The cost lands in three places:

• Dues you cannot prove: a credit customer says only 15 cartons arrived, not 18. Without a signed challan you either argue or write off the difference.
• Stock that never reconciles: handwritten challans in a book do not reduce stock anywhere. At month end the spreadsheet says 40 cartons, the shelf says 37.
• Wrong batch, wrong cost: if a challan does not say which shipment the goods came from, your profit per batch is a guess.

This is why the challan should come from the same record as the order, the invoice and the stock. We covered the dues side in how to track customer dues in a wholesale business and the stock side in our wholesale inventory management guide.

How do you make a delivery challan, step by step?

Make the delivery challan from a confirmed order, after picking and before the vehicle leaves. Here is the workflow, using a worked example: a customer orders 24 cartons of instant noodles, 24 packs per carton.

1. Confirm the order in cartons: 24 cartons = 576 packs.
2. Pick from specific batches: 18 cartons from shipment SH-0142, 6 cartons from SH-0150, oldest stock first.
3. Print the challan with both batch references, quantities in cartons and packs, and vehicle details.
4. Print the gate pass so the guard can check the load against the order without seeing prices.
5. Get the challan signed at the customer’s door and file your copy.
6. Mark the order delivered and send or print the invoice.
7. Record payments as they come: for example, the customer pays the invoice in three parts over a month.

The steps are simple. The hard part is doing all seven without retyping the same order into a challan book, an invoice template and a stock sheet.

How does WholeStock handle delivery challans in WordPress?

WholeStock keeps the challan, gate pass, invoice and stock movement tied to the same sales order, so you enter the order once. The free plugin runs the order and stock side; WholeStock Pro adds the printable warehouse documents.

Here is the same noodle order in WholeStock:

• Free: record the inbound shipment with supplier, reference and per-unit cost. Each line becomes a traceable batch, and stock reconciles in packs while you sell in cartons.
• Free: create the sales order from batches SH-0142 and SH-0150. Overselling is blocked, so you cannot dispatch 24 cartons if only 20 remain.
• Pro: print a picking list showing quantities in cartons and the shipment and carton each line comes from, with no prices.
• Pro: print the delivery challan and gate pass for the order.
• Free: move the order from confirmed to delivered, print or share a branded PDF invoice, and record partial payments in cash, bank, mobile or check. The customer’s outstanding due updates automatically.
• Pro: print a customer ledger statement with a running balance when you chase the next payment.

A few practical answers to the usual objections:

• No WooCommerce or online store required. WholeStock works standalone on WordPress 6.2+ with PHP 8.0+, on standard hosting.
• Your data stays in your own WordPress database. Customers, prices and stock are not sent to an outside service.
• Staff roles let editors manage orders and stock without seeing cost or profit.
• No per-seat or monthly fees. WholeStock Pro is sold as annual or one-time lifetime licences, starting at $49 a year for one site, with a 14-day money-back guarantee.

If you invoice under GST in India, compare the printed challan with the Rule 55 fields above before you rely on it for tax purposes.

Delivery challan FAQ