GRN vs Delivery Challan vs Delivery Note: What's the Difference in India?

Walk into the receiving department of any Indian enterprise and you will find multiple documents accompanying a delivery. There is the delivery challan from the supplier. There is the packing list. There is the e-Way Bill printout. And then there is the GRN that the receiving team creates.

These documents confuse procurement and finance professionals across India — particularly those newer to supply chain or working across functions where the terminology is not standardised. This guide provides a definitive explanation of the four documents that most commonly cause confusion in Indian procurement.

The Four Documents at a Glance

1. Delivery Challan — The Supplier's Movement Document

A Delivery Challan is a document issued by the supplier when goods are moved from one place to another without a tax invoice being raised at that point. It is a formal GST document governed by Rule 55 of the CGST Rules 2017.

When is it used? Under GST, a Delivery Challan is issued (instead of a tax invoice) in the following situations:

• Goods sent for job work (principal to job worker)
• Goods sent between branches of the same entity within a state
• Goods transported in multiple shipments (partial or knocked-down condition)
• Goods exported for exhibition or promotional purposes (not a sale)
• Any situation where goods move but no tax invoice can be issued at the time of removal

What must it contain? Under Rule 55(2), a Delivery Challan must include: date and serial number, name and GSTIN of consignor and consignee, HSN code, description and quantity of goods, taxable value, tax rate and amount, and place of supply. It must be prepared in three copies: original for the consignee, duplicate for the transporter, and triplicate for the consignor.

Is a Delivery Challan a GRN? No. The Delivery Challan is created by the supplier to authorise the movement of goods. The GRN is created by the buyer to confirm that the goods were received and inspected. They record the same transaction from opposite perspectives.

2. Delivery Note — The Supplier's Packing Document

A Delivery Note (sometimes called a packing slip or dispatch note) is a commercial document created by the supplier that lists what was dispatched with a shipment. It is not a formal GST document — it has no specific format mandated by law.

A Delivery Note accompanies most commercial shipments — it tells the receiver what should be in the package before they open it. Unlike the Delivery Challan, it does not need to meet GST-specific format requirements. In practice, many suppliers issue a single document that serves as both — listing the goods dispatched while also meeting GST Delivery Challan requirements.

Is a Delivery Note the same as a Delivery Challan? They are often confused, but they are different. A Delivery Challan is a GST-mandated document with specific legal requirements. A Delivery Note is a commercial document with no mandatory format. When the document meets GST requirements, it functions as a Delivery Challan even if it is labelled a Delivery Note.

3. e-Way Bill — The Movement Compliance Document

An e-Way Bill is an electronic document required under GST for the movement of goods above a specified value threshold. It must be generated before the movement of goods begins and must travel with the consignment. An e-Way Bill is required when goods valued above ₹50,000 (in most states) are being transported in relation to a supply or for any other reason such as job work or returns.

The e-Way Bill can be generated by the registered supplier, the registered recipient, or the transporter. It contains: GSTIN of supplier and recipient, place of delivery, invoice or challan number and date, value of goods, HSN code, transporter ID and vehicle number, and validity period based on distance.

Is an e-Way Bill a GRN? No. The e-Way Bill is a transit compliance document — it authorises the movement of goods from origin to destination. It does not confirm receipt. The GRN is created by the buyer after the goods arrive and are inspected. In an audit, both documents together provide the complete chain of evidence: the e-Way Bill shows the goods were legally in transit, and the GRN shows they were received by the buyer.

4. GRN — The Buyer's Receipt Document

The Goods Received Note is an internal document created by the buyer's receiving team to confirm that goods from a supplier have been physically received, inspected, and accepted. It is created after the receiving team has compared the delivery against the purchase order, counted and verified quantities, checked condition and quality, confirmed batch codes and expiry dates where applicable, and noted any discrepancies.

Is a GRN mandated by GST? No. The GRN has no mandatory format or legal requirement under GST. It is an internal financial control document. However, the GRN supports GST Input Tax Credit claims (ITC can be claimed only for goods actually received), is required for three-way matching before supplier payment, and is referenced in financial audits as evidence of goods receipt.

How All Four Documents Work Together in a Typical Indian Procurement Transaction

1. PO raised by buyer — Buyer raises a Purchase Order for goods. This is the authorisation.
2. Goods dispatched by supplier — Supplier issues a Tax Invoice (if it is a sale) or Delivery Challan (if goods move without a tax invoice), a Delivery Note or Packing Slip, and an e-Way Bill if consignment value exceeds ₹50,000.
3. Goods in transit — All three documents — Delivery Challan / Tax Invoice, Delivery Note, and e-Way Bill — travel with the goods.
4. Goods arrive at buyer's location — Receiving team checks the Delivery Note / Challan against the PO, counts and inspects goods, notes discrepancies, and creates the GRN — the buyer's own record of what was received.
5. Invoice arrives from supplier — Supplier sends the Tax Invoice if not already sent with goods.
6. Three-way matching — AP team compares Purchase Order (what was authorised), GRN (what was received), and Tax Invoice (what the supplier is claiming payment for). All three must agree before payment is approved.
7. ITC claim — Finance team claims Input Tax Credit based on the Tax Invoice, supported by the GRN as evidence of actual receipt.

Full Comparison: All Four Documents Side by Side

Common Confusions — Answered

“Our supplier sends a Delivery Challan. Do I still need to create a GRN?” Yes. The Delivery Challan is the supplier's document. The GRN is yours. You need your own internal record of what you received and inspected — for three-way matching, inventory accuracy, ITC support, and audit purposes.

“Can I use the Delivery Note as the GRN?” No. The Delivery Note records what the supplier dispatched. The GRN records what you received. These may differ — short deliveries, damage, and quality failures mean the GRN may show different quantities or conditions than the Delivery Note.

“What happens if the e-Way Bill has expired when the goods arrive?” The transporter is liable for movement of goods under an expired e-Way Bill. The buyer should document the situation in the GRN and notify the supplier. The e-Way Bill compliance is the supplier's and transporter's responsibility.

Frequently Asked Questions