Supply of Goods with Delivery Challan

[Kanta Lodha]

We need to send a shipment from Delhi to Chennai. This will include multiple consignment. Since the billing is based on the milestone we cannot raise the tax invoice before that. The completion of milestone is subject to shipment of 3-4 consignments.

Can we issue delivery challan in this case. And what will be the course of action for E-way Bill.

[Sadanand Bulbule]

You need to issue separate three delivery challans/E-way bill for each consignment with reference of Tax Invoice and the last consignment to be accompanied by the original tax invoice.

For more details, refer the provisions of Rule 55 of the CGST Rules, 2017. 

[Kanta Lodha]

Thanks,

As per rule 55, tax invoice should be issued before the first consignment. But in this case, we can't issue tax invoice before the shipment. It can be issued only after the completion of milestone, i.e. 3-4 shipment. 

Is there any alternative for the same

[Sadanand Bulbule]

Rule 55[4] reads under:

(4) 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 for the purpose of supply, the supplier shall issue a tax invoice after delivery of goods.

[Shilpi Jain]

You can issue a delivery challan and the EWB on that basis.

AI Summary

Delivery challan permitted when invoice cannot be issued before removal; use challans and e way bills, issue tax invoice after delivery. When a tax invoice cannot be issued before removal because billing is milestone linked, suppliers may use a delivery challan and must prepare an E-way bill for each consignment, referencing the tax invoice; the supplier must issue the tax invoice after delivery in accordance with Rule 55(4).