Pro forma Invoice vs Commercial Invoice in Import & Export: Which one is Acceptable for Customs Clearance?

A person who wants to start an Export and Import business must know about Invoice. An invoice is a document that provides the details of cost and quantities of goods and services. Normally, the Exporter (seller) will send an invoice to the Importer (buyer). The invoice will explain the terms and conditions of Seller’s payment.

We have various type of invoices in an export and import business. Here I am going to the difference between Pro-forma Invoice and Commercial Invoice.

What is Pro-forma Invoice?   

Pro-forma Invoice is a preliminary document that is sent by the Exporter (seller) to the Importer (buyer).

It contains the details of,

  • Estimate value of goods,
  • Weight of goods,
  • Quantity and quality of goods,
  • Transportation cost.

The seller will provide the Pro-forma Invoice before the sale takes place. If the buyer is satisfied with the  Pro-forma Invoice only, he will send a Purchase Order or Letter of Credit to the seller. We can say that Pro-forma Invoice is an agreement between the seller and buyer. The buyer will prepare the purchase order according to the Pro-forma Invoice.

Pro-forma Invoice is not a payment request or demand. It is just a bill that shows how much the Exporter expects for his products or services from the Importer. After receiving the Purchase Order/Letter of Credit only, the Exporter will start manufacturing goods.

What is Commercial Invoice?

Commercial Invoice is the legal document for sending goods across international borders. It is the main customs clearance document to declare the true value of goods. An Importer must need this document when he takes out the goods from customs department. The Exporter will prepare and send a commercial Invoice to the Importer.

It contains the details of,

  • Description of goods,
  • Description of paying list,
  • Net weight and gross weight of products,
  • Quality and  quantity of goods for shipment,
  • Origin (country) of goods,
  • Insurance and shipping charges,
  • Exporter and Importer details.

There is no particular format for commercial invoice. It is considered as a bill for sale between the seller and buyer. It is mainly used to maintain the accounts for both Exporter and Importer. Commercial Invoice is also known as “Shipping Invoice”.

The Exporter will create the commercial Invoice after manufacturing and loading the goods for shipment.

Main difference between the Pro-forma Invoice and Commercial Invoice

Pro-forma Invoice is considered as “Temporary Invoice” and Commercial Invoice is considered as “Actual (original) Invoice”.

Which one (invoice) is accepted for customs clearance?

Commercial Invoice is accepted for customs clearance. Because it is a legal document. But Pro-forma Invoice is not a legal document.

If you have any other doubts regarding Pro-forma Invoice and Commercial Invoice, let us know through your comments.

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