Proforma Invoice FAQs (India)
What is a proforma invoice?
A proforma invoice is a preliminary document a seller sends before goods or services are delivered. It lists the items, quantity, price, taxes and terms of sale so the buyer can approve the order, arrange payment or clear customs. It is not a demand for payment and not a tax invoice.
Is a proforma invoice valid under GST in India?
No. A proforma invoice is not a tax invoice, so it does not create a GST liability and the buyer cannot claim input tax credit on it. The seller issues a GST tax invoice at the time of actual supply. Always confirm your specific case with a chartered accountant.
When should I use a proforma invoice?
Use it for advance payment requests, export orders (bank remittance, letter of credit, customs clearance), sending samples, quotations that need buyer confirmation, and consignment shipments.
What details should an Indian proforma invoice include?
Seller and buyer name and address, GSTIN, proforma invoice number and date, item description with HSN/SAC, quantity, rate, taxable value, applicable GST (or export under LUT declaration), currency, payment terms, bank details, validity period and a clear 'Proforma Invoice - Not a Tax Invoice' label.
What is the difference between a proforma invoice and a tax invoice?
A proforma invoice is a preliminary, revisable quotation-style document that is not booked as a sale. A tax invoice is the final legal document issued on supply, records the sale and GST, and is required to claim input tax credit.