Material Challan Template

Delivery challan format for tracking material issued to vendors or job workers with acknowledgment section.

Why Use a Material Challan?

A Material Challan (or Delivery Challan) is a critical document for moving goods from one place to another without a sale invoice. It is commonly used when sending material for job work, exhibitions, or simply moving stock between warehouses.

Mandatory Sections in Material Challan

Section	GST Requirement	Example
Challan Number	Unique sequential number	DC/2026/0045
Date	Date of dispatch	10-Feb-2026
From (Consignor)	Your company name, GSTIN, address	XYZ Industries, GSTIN: 27XXXXX
To (Consignee)	Job worker/vendor name, GSTIN	ABC Job Work, GSTIN: 27YYYYY
Purpose	Mention “For Job Work Only”	For Powder Coating - Job Work
HSN Code	Mandatory for each item	7326 (Metal parts)
Return Date	Expected return within 1 year (GST rule)	25-Feb-2026

Step-by-Step: Creating a Material Challan

Generate Challan Number: Use sequential numbering like DC/MMYY/001.
Fill Sender Details: Your company name, GSTIN, full address.
Fill Receiver Details: Job worker's name, GSTIN, address.
List Items: Item description, HSN code, quantity, unit (Nos/Kg/Mtrs).
Mention Purpose: Clearly write “For Job Work Only - Not For Sale”.
Set Return Date: Specify expected return date (must be within 1 year per GST).
Add Vehicle Details: Vehicle number, driver name, LR number if applicable.
Get Signature: Authorized signatory from your end signs before dispatch.
Obtain Acknowledgment: Get receiver's signature and stamp upon delivery.

Real-World Example: Sending Parts for Powder Coating

Scenario: A fabrication unit in Gujarat sends 200 brackets to a local powder coating vendor.

Challan No: DC/0226/018
Date: 10-Feb-2026
From: Precision Engineers, Ahmedabad, GSTIN: 24ABCDE1234F1Z5
To: Rainbow Coaters, Ahmedabad, GSTIN: 24XYZAB5678P1Q2
Item: MS Brackets (HSN: 7326), 200 Nos
Purpose: For Powder Coating (Black) - Job Work Only
Return By: 20-Feb-2026
Vehicle: GJ-01-AB-1234

The powder coater stamped and signed the challan upon receipt. Parts were returned after coating with the same challan reference.

GST Compliance Tips

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Time Limit: Material sent for job work must return within 1 year (3 years for moulds/dies/jigs).
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E-Way Bill: Required if consignment value exceeds ₹50,000 or distance exceeds 50 km (state-specific).
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ITC Eligibility: You can claim Input Tax Credit even when goods are with job worker.

Common Mistakes to Avoid

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Missing HSN Code: GST audit will flag challans without HSN codes.
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No Return Date: Can cause GST liability if material stays beyond 1 year.
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Wrong GSTIN: Incorrect job worker GSTIN can invalidate the challan.
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Not Getting Receiver Signature: No proof material was delivered if dispute arises.

Best Practices

Triplicate Copies: Keep 1st copy with you, 2nd for job worker, 3rd with vehicle driver.
Track Return: Maintain a register of all challans and tick off when material returns.
WhatsApp Photo: Click photo of signed challan and share with accounts team immediately.
Link to Work Order: Reference the Work Order number on challan for tracking.
Monthly Reconciliation: Review all pending challans monthly to avoid GST issues.