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Proforma invoice format

A proforma invoice gives the buyer the exact price, tax and terms before the sale, so they can arrange payment, internal approval or an import licence. Under GST it is not a tax invoice and creates no tax liability.

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Proforma invoice format · example

FromNarmada Electrical Drives
ToKrishna Agro Processing Pvt Ltd
CurrencyINR
DescriptionQtyPriceAmount
Three-phase induction motor, 15 kW, foot mounted (HSN 8501)4₹42,500.00₹1,70,000.00
Motor control panel with VFD, 15 kW (HSN 8537)4₹68,000.00₹2,72,000.00
Packing and forwarding1₹6,000.00₹6,000.00
Total₹5,28,640.00

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How to use the proforma invoice format

  1. Title it "Proforma invoice" and add your GSTIN.
  2. Add the buyer and the goods or services, with HSN or SAC and GST.
  3. State the advance required, delivery period and validity.
  4. Save it; when the order is confirmed, issue the tax invoice from it.

Proforma invoice format

  • Title "Proforma invoice" and a reference number from its own series
  • Date and validity period
  • Seller name, address, GSTIN and bank details
  • Buyer name, address and GSTIN
  • Description, HSN or SAC, quantity, rate and value
  • GST rate and amount, for information
  • Advance required and the balance terms
  • Delivery period, freight and insurance
  • Signature

Proforma invoice or tax invoice?

Proforma invoiceTax invoice
PurposeOffer, or request for an advanceRecord of a supply
GST liabilityNoneGST payable
Input tax credit for the buyerNoYes
NumberingIts own seriesConsecutive GST series
Reported in GSTR-1NoYes

Questions

Is GST payable on a proforma invoice?

No. GST becomes payable when the tax invoice is issued or, for services, when an advance is received. A proforma invoice is only an offer.

Is GST payable on an advance received against a proforma?

For goods, no: GST on advances for goods was removed in November 2017. For services, yes: issue a receipt voucher and pay GST on the advance.

Can the buyer claim input tax credit on a proforma invoice?

No. Credit needs a tax invoice or debit note.

Why do banks ask for a proforma invoice?

To release payment for imports or open a letter of credit, banks need a document from the supplier showing price and terms. Buyers also use them for loan and licence applications.

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