XML Unicode strings with encoding declaration are not supported

You’ll have to encode it and then force the same encoding in the parser:

from lxml import etree
from lxml.etree import fromstring

if request.POST:
    xml = request.POST['xml'].encode('utf-8')
    parser = etree.XMLParser(ns_clean=True, recover=True, encoding='utf-8')
    h = fromstring(xml, parser=parser)

    return HttpResponse(h.cssselect('delivery_reciept status').text_content())