What Is a Proforma Invoice?

A proforma invoice looks like an invoice but acts as an offer. The seller lists the goods or services, quantity, price, currency, delivery terms and payment terms. The buyer reads it, agrees, and may pay an advance or open a letter of credit against it. Some buyers also need it for approvals in their own country. When the sale actually happens, the seller issues the commercial invoice. The Foreign Trade Policy list of mandatory export documents names the commercial invoice cum packing list and does not name the proforma invoice, so it is not part of that list.

For example, an Indian software tools reseller sends a proforma invoice to a buyer in Singapore quoting 50 licences at USD 40 each. The buyer pays an advance, and the seller later issues a commercial invoice for the delivered order.

• Mandatory documents: The list of mandatory export documents in FTP 2023, para 2.06(a) names the commercial invoice cum packing list. It does not name a proforma invoice.
• Advance payment: If a buyer pays in advance, the money is an advance received against exports. See advance payment against exports for the RBI position.
• GST: Rule 46 sets what a tax invoice must contain (CGST Rule 46). Treat the proforma as a quote and issue the tax invoice for the supply. Ask a tax adviser about the timing for your case.
• Bank compliance: Banks may ask for the invoice when an inward remittance arrives. Keep the proforma and the final invoice together so the amounts can be explained, and see your bank is asking for an invoice.
• Income tax: A proforma invoice is not a record of income on its own. Income is recorded on the final invoice and receipts. Ask a tax adviser for your case.

The seller sends the proforma invoice after the buyer asks for a quote. After approval, the seller delivers and issues the commercial invoice.

1. The buyer asks for a price and terms.
2. The seller prepares a proforma invoice with goods or services, quantity, price and currency.
3. The seller marks the document clearly as a proforma invoice and adds a validity date.
4. The buyer approves the order and may pay an advance or arrange a letter of credit.
5. The seller dispatches the goods or delivers the service.
6. The seller issues the commercial invoice with the final amounts and links it to the proforma.

Prepare a proforma invoice by copying the order details into an invoice-style document marked "Proforma". Make clear that it is a quote and not a tax invoice. Keep the figures consistent with the final invoice.

1. Write the seller's and buyer's full names and addresses.
2. Label the document clearly as a proforma invoice and add a reference number and date.
3. List the goods or services, quantity, unit price and total in the agreed currency.
4. State delivery terms, payment terms and the validity period of the quote.
5. Add bank details for the buyer's advance payment only after checking them with your bank.
6. Send the document and keep a copy for the order file.

A proforma invoice is a preliminary document before the sale, while a commercial invoice records the completed sale. See commercial invoice.

• Tax invoice: A proforma invoice does not replace the tax invoice. Issue the invoice with the Rule 46 details for the supply.
• Binding: Whether a proforma binds the seller depends on the order terms. Write the validity date and conditions on it.
• Customs: Customs and the bank usually work from the commercial invoice, so the proforma alone may not be accepted.
• Different numbers: If the final invoice differs from the proforma, note the reason so the bank and buyer can follow it.

• Commercial invoice: The final sales document for the export.
• Advance payment: Money received before the export takes place.
• Letter of credit: A bank undertaking to pay against documents.
• Incoterms: Trade terms stated on the quote and invoice.
• Export invoice format: The fields an export invoice carries.

Every rule and definition on this page is linked to its official source, checked on the dates below.

1. Foreign Trade Policy 2023, Chapter 2 (DGFT revised version v1.2.2), Para 2.06 (mandatory export documents) and para 2.41 (checked 9 Oct 2026)
2. Central Goods and Services Tax Rules, 2017: Rule 46 (Tax invoice), Proviso on export endorsement, recipient, delivery address and country of destination (checked 9 Oct 2026)
3. FEMA (Export and Import of Goods and Services) Regulations, 2026, Notification FEMA 23(R)/2026-RB (amended up to 22 September 2026), Regulations 3(2) and 5 (checked 9 Oct 2026)