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Pre-sale documents · not a tax invoice

Proforma invoice format — what it is, and what it isn't.

A proforma invoice looks like a bill, but it's a pre-sale estimate — no GST liability, no ITC for the buyer. Here's exactly when to use one, what it needs, and how it differs from the real thing.

  • Reviewed July 2026
  • 6 min read
  • CA Anil Agarwal & the TatvaBooks team

What is a proforma invoice?

A proforma invoice is a preliminary document that a seller sends a buyer before the actual sale happens. It's formatted like a real invoice — line items, quantities, rates, estimated GST, a grand total — but it carries no legal weight as a tax document. Nothing is owed on it, and it never enters your GST return.

Think of it as a formal, invoice-shaped version of a quotation: it tells the buyer exactly what they'll be charged once the sale actually happens, in a format that banks, customs officers and finance teams recognise and accept for their own paperwork.

When it's used

  • Advance payment requests — asking a buyer to pay upfront before you start work or ship goods.
  • Import / export customs clearance — customs authorities often want a proforma invoice to assess duty before the real shipment invoice exists.
  • Letters of credit — banks require a proforma invoice to open an LC on behalf of an importer.
  • Internal approvals — a buyer's finance or procurement team uses it to get budget sign-off before committing.

In every case, the actual tax invoice is raised separately, once the supply is made — the proforma invoice is what got the deal moving.

Fields a proforma invoice needs

  • Clear "Proforma Invoice" label — in the header, so it's never confused with the real tax invoice.
  • Seller and buyer details — names, addresses, GSTINs.
  • Reference number and date — a sequence for tracking, even though it's not legally mandated.
  • Item table — description, HSN/SAC code, quantity, rate and amount.
  • Estimated GST breakup — CGST+SGST or IGST, so the buyer sees the likely landed cost.
  • Validity period — how long the quoted price and terms hold.
  • Payment / delivery terms — especially advance-payment percentage and expected delivery timeline.

Worked example

A machinery supplier sends this to a buyer to support an advance-payment request before manufacturing begins.

Proforma Invoice — Not a Tax Invoice

PI No. PI-2026-0056  ·  Date: 02-07-2026

Valid until: 01-08-2026

Seller

Precision Engineering Works

Ludhiana, Punjab

GSTIN: 03AABCP4321H1Z9

Buyer

Anmol Garments Pvt Ltd

Pune, Maharashtra

GSTIN: 27AAECA1234F1Z5

Description HSN Qty Rate (₹) Amount (₹)
Industrial Sewing Machine, Single Needle 8452 5 Nos 18,500.00 92,500.00
Installation & commissioning (per unit) 9987 5 Nos 1,200.00 6,000.00
Taxable value 98,500.00
IGST 18% (estimated) 17,730.00
Estimated total 1,16,230.00

Payment terms

50% advance on order confirmation, balance before dispatch.

Delivery

6-8 weeks from receipt of advance payment.

Note the amounts are marked "estimated" and the header explicitly says not a tax invoice. Once the machines ship, the seller raises a real tax invoice — same GSTIN, same items, but now it's the document that fixes the GST liability and lets the buyer claim ITC.

Proforma invoice vs tax invoice

Point Proforma invoice Tax invoice
Is it a tax invoice? No — it's a quote-style estimate, not a demand for payment. Yes — it's the legal document under Rule 46 that fixes GST liability.
Can the buyer claim ITC on it? No. ITC can only be claimed against a valid tax invoice. Yes, subject to the usual conditions (goods/services received, tax paid, GSTR-2B reflected).
Does it require sequential numbering? No legal mandate — but a consistent scheme helps tracking. Yes — mandatory sequential serial number, unique per financial year (Rule 46).
When is it typically used Advance payment requests, import/export customs clearance, letters of credit, internal approvals. At or before the actual time of supply — this is what the sale is finally billed against.
Does it affect your GST return No — a proforma invoice never appears in GSTR-1 or GSTR-3B. Yes — every tax invoice rolls into your GSTR-1 for that period.

For the fields a real tax invoice must carry under Rule 46, see our invoice format guide. And if what you actually need is a pre-agreement price proposal (rather than an advance-payment or customs document), a quotation is usually the better fit.

Creating proforma invoices in TatvaBooks

The risk with proforma invoices made in Word or Excel is drift — the numbers on the proforma don't match what eventually gets billed, which raises questions with banks, customs, or your own buyer. In TatvaBooks you create a document explicitly marked as a proforma invoice, and when the sale is confirmed, convert it into the real tax invoice in one click — same line items, HSN codes and rates, now GST-correct and sequentially numbered. Create this free in TatvaBooks. See the full GST billing workflow or the cloud accounting overview.

Frequently asked questions

What is a proforma invoice?
A proforma invoice is a preliminary, quote-style document a seller sends a buyer before the actual sale — stating what will be supplied, at what price, and on what terms, as if the sale had already happened. It looks like an invoice but has no legal or tax standing: it's not a demand for payment and it doesn't create a GST liability.
Is a proforma invoice the same as a tax invoice?
No. A tax invoice under Rule 46 of the CGST Rules is the actual billing document — it's what creates GST liability for the seller and what the buyer needs to claim Input Tax Credit (ITC). A proforma invoice is issued before the supply, purely as an estimate or commitment document, and cannot be used for ITC or reported in any GST return.
When is a proforma invoice used?
Common uses: requesting an advance payment before starting work, supporting a buyer's import documentation or customs clearance, backing a letter of credit application with a bank, or simply giving a buyer a formal-looking cost estimate to get internal approval before you raise the real invoice.
Can I claim Input Tax Credit on a proforma invoice?
No. ITC can only be claimed against a valid tax invoice that meets the conditions under Section 16 of the CGST Act — goods or services actually received, tax actually paid by the supplier, and the invoice reflected in your GSTR-2B. A proforma invoice fails all of these; it's not a tax document.
What's the difference between a proforma invoice and a quotation?
They're close cousins but not identical. A quotation is a price proposal sent before any agreement — the buyer may still negotiate or reject it. A proforma invoice is issued after the deal is essentially agreed, formatted to look like a real invoice, often to support a specific ask like an advance payment or customs paperwork. See our quotation format guide for the full comparison.
Does a proforma invoice need to say 'not a tax invoice' anywhere?
There's no single statutory line mandated, but best practice — and what most banks and customs authorities expect — is to clearly label the document 'Proforma Invoice' in the header, so it's never mistaken for the actual tax invoice. Ambiguity here is exactly what leads to ITC claims being rejected later.
Can TatvaBooks generate a proforma invoice?
Yes. In TatvaBooks you can create a document explicitly marked as a proforma invoice — itemised pricing, HSN codes and estimated GST included — and share it as a PDF for an advance-payment request or customs paperwork. When the actual sale happens, you convert it into a real tax invoice with one click; nothing gets re-typed. Free on Solo (₹0); Business (₹599/month) adds multi-user access.

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No re-typing when the deal is confirmed. Line items, HSN codes and rates carry straight through.

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