Goods Receipt Note (GRN): Format, Tolerances and GST Rules

A goods receipt note (GRN), also called a material receipt note, is an internal document your stores or receiving team raises when a delivery arrives. It records what came in, what was accepted and what was rejected against a purchase order (PO). The supplier's delivery challan and tax invoice record what the supplier says it sent and bills.

GST law prescribes the tax invoice, the delivery challan and the e-way bill (the electronic document required to move goods above a value threshold). It does not prescribe a GRN, so the GRN is your own control. Comparing the PO, the GRN and the invoice before you pay is a three-way match, and the GRN is the only one of the three you write yourself.

A usable GRN format has a header that ties the receipt to the order and the supplier's papers, and a line table that keeps received, accepted and rejected quantity in separate columns.

Header

Lines

Four tests keep the format honest:

1. Accepted plus rejected equals received on every line. One line that does not add up fails the GRN.
2. The GRN is dated the day of delivery and raised before putaway. After putaway, damaged and good stock are hard to separate. This is our recommendation.
3. Each delivery has its own GRN. If a PO for 1,000 units arrives in two lots of 500, raise two GRNs, so every receipt can be matched to its own invoice or dispute. This is our recommendation.
4. Batch-tracked items carry lot and expiry at the dock. If you are unsure which term applies to your stock, see lot number vs batch number.

There is no statutory tolerance for goods receipts. A workable starting policy, which is our recommendation, is plus or minus 2% for bulk goods bought by weight or volume, and zero for counted or serialised items. Accept what the written tolerance allows, record everything else as rejected, and never enter the ordered quantity as received.

On a 500-unit order at ₹240 a unit, a GRN recording 468 accepted units cuts the amount to pay from ₹1,41,600 to ₹1,32,537.60, leaving ₹9,062.40 to recover from the supplier. This is our own calculation, with GST assumed at 18%; the rate on your goods depends on their classification.

The working: 500 − 480 = 20 units short; 12 delivered units were damaged; 480 − 12 = 468 accepted; 20 + 12 = 32 units not payable. Each is valued at ₹240, and 18% GST is added.

The invoice matches the PO, so a two-way match (comparing only the PO and the invoice) passes. Only the GRN shows that 32 units are missing from the shelf. Pay for 468, record the 32 as a dispute, and ask for a credit note against the original invoice.

The GST on the 32 units (₹1,382.40) stays in the supplier's invoice until a credit note is issued. Ask your chartered accountant (CA) whether to claim credit on the full invoice and reverse it when the credit note arrives, or to wait.

No. A GRN is not a GST document and does not unlock or block ITC. Credit depends on the conditions in Section 16 of the CGST Act, including that you hold a valid tax invoice and have received the goods. The GRN is your proof of what was received.

Credit is also available only if the supplier's invoice appears in your auto-drafted GSTR-2B statement (Section 16(2)(aa)), the tax has been paid to the government, and you have filed GSTR-3B, the monthly summary return.

"Received" does not always mean physically at your premises. Circular 241/35/2024, dated 31 December 2024, applies the Explanation to Section 16(2)(b): goods count as received when the supplier hands them to a transporter on the buyer's direction. So on ex-works purchases, where the buyer takes over the goods at the supplier's gate, credit can be allowed on a date earlier than your GRN.

Two practical consequences, both our recommendation:

• Staple the GRN to the invoice. It is the evidence behind the quantity you claim credit on.
• If goods arrive before the invoice, record the receipt, but do not expect credit until the invoice exists. Credit follows the invoice appearing in GSTR-2B, whatever date your GRN carries.

Book an accrual on the day the goods arrive: debit inventory, credit a liability account for goods received but not billed, valued before GST because credit is not claimed until the invoice exists. TallyPrime records the receipt note first and flags it in its Purchase Bills Pending report, which lists purchases where goods may have been received but not invoiced.

Using the accepted goods from the worked example:

The amount is 468 accepted units at ₹240. The 32 disputed units are not accrued. When the invoice arrives, reverse the accrual and book the purchase and GST in the normal way. Your CA confirms the treatment for your books.

At month-end, run four tests:

1. Every GRN in the month has a PO number or a named approver. A blank field fails.
2. No GRN exceeds its PO line without a sign-off. Any line above the PO quantity with no approval fails.
3. Unbilled GRN value equals the accrual you booked. Sum the GRNs with no invoice; the accrual must match to the rupee.
4. Every unbilled GRN older than your supplier's usual billing cycle has a chase note. One with none fails.

We record a receipt as a material inbound. You choose the Purchase type and the supplier, and we list that supplier's outstanding purchase orders. You select the products received and change the quantity where the supplier delivered less than ordered. For a delivery with no PO, choose Purchase without PO, select the supplier and add products and quantities manually. Where a cost book exists for the supplier's product, we fill in the price.

Saving the inbound raises stock at that location and posts a journal entry that debits the inventory account set on the product and credits AP Clearing, so the receipt reaches your books on the day of delivery.

On the dock side, we support barcode-based receiving, palletising, pallet labels and putaway into warehouse bins. We track stock by lot, batch, expiry date and serial number, and we are built natively on Salesforce, with published integrations for QuickBooks Online and Tally. Our landed cost feature adds shipping, duties and fees to the cost of what you receive.

As of October 2026, plans are billed yearly: Basic is $199 a month for one user, Advance is $499 a month for two users, and Enterprise is on request; see the pricing page. Purchase orders and barcoding are on Basic. Lot and serial tracking, bin tracking and landed cost are on the Enterprise plan.

As of October 2026, new accounts get a 15-day free trial with full access and no credit card. Setup typically takes a minimum of two weeks, depending on how ready your item, warehouse and supplier data is. To start a trial or see receiving against your own purchase orders, talk to our sales team.