Challan › Supply on approval

Delivery challan for supply on approval

Jewellers, saree and furniture shops, and machine dealers often let a customer keep goods for a few days before deciding. Until the customer decides, there is no sale, so the goods travel on a delivery challan, not an invoice.

How the rule works

For goods sent on approval or on "sale or return", GST says the invoice is issued when the buyer accepts the goods, or six months from the day they were sent, whichever is earlier. So:

The buyer accepts on day 10: make the tax invoice on day 10.
The buyer returns everything: no invoice; mark the challan as returned.
The buyer neither accepts nor returns within six months: the sale is treated as made, and the invoice is due at the end of six months.

What to write on the challan

Purpose: Supply on approval.
Each piece separately, with weight, size or serial number where it matters, so returns can be matched.
Rate and value of each piece. Tick GST if you want the customer to see the full price with tax.
In Terms: how many days the customer has to decide, for example "Return or confirm within 7 days".

A worked example

A saree shop in Varanasi sends 6 silk sarees to a regular customer in the same city on 4 Nov 2026 on DC/26-27/033, each ₹12,500, value ₹75,000. On 9 Nov the customer keeps 2 and returns 4.

Set the challan status to Goods returned for the 4 back, and note "2 kept" in Notes.
Make the tax invoice for 2 sarees: ₹25,000 + GST at the rate that applies to your goods. Press Make invoice on the challan and delete the four returned lines on the invoice before saving.
Check that the invoice refers to approval challan DC/26-27/033 (add it in Notes if it is not there), so your accountant can match the two.

Other movements that are not a sale

Movement	Challan purpose	Note
To your own godown or shop, same GSTIN	Branch or stock transfer	Not a supply
To your branch in another state	Use a tax invoice	Different GSTIN, so it is a supply
For repair to a mechanic or service centre	Other: "For repair"	The repairer bills the repair charges
To an exhibition or fair	Other: "For exhibition"	Invoice the pieces sold there
Sale where quantity is weighed at delivery	Sale (invoice to follow)	Invoice once the quantity is known

Common mistakes

Forgetting approval goods. Open Saved delivery challans each month and look at those still at Goods sent.
Making a fresh invoice by hand with different rates. Make it from the challan so names and rates match.
Treating a stock transfer to another state as a challan movement.

If you are not registered under GST, a challan is still a useful record of what left your shop and who has it.

Make a delivery challan now.Open the maker