Commercial invoice
Commercial invoice is a customs document when used in foreign trade and is mainly used for clearance purposes with regard to customs.
Updated: May 31, 2024
Commercial invoice:
Commercial invoice is a customs document when used in foreign trade and is mainly used for clearance purposes with regard to customs.
Some facts about Commercial invoice:
- Commercial invoice is an export document that acts as legal evidence of a sale transaction between the buyer and the seller.
- Commercial Invoice is a contract and proof of sale that is issued by the seller to the buyer which describes the goods being sold and details the price, value, and quantity of the goods.
- Commercial invoices need to be produced while shipping goods to international clients.
- Commercial invoice helps in the determination and assessment of duties and taxes payable.
- A commercial invoice is used as a customs declaration provided by the person or company that is exporting an item across international borders
- The full description of goods sold, their quantities, and value as previously agreed upon by the parties are mentioned in a commercial invoice.
- A few specific pieces of information such as the parties involved in the shipping transaction, the goods being transported, the country of manufacture, and the Harmonized System codes for those goods are usually included in the document.
- A statement certifying that the invoice is true, and a signature is often included commercial invoice .
- Commercial invoice is issued by the seller or the exporter to the buyer or the importer which acts as proof of sale.
- Commercial invoices are most commonly used by small businesses who sell products to consumers and where the payment has already been made for the goods.
- Commercial invoices used by small businesses serves as documentation for customs purposes.
- The Harmonized System is a method of classifying traded products used by customs authorities all around the world which them to assess the duties and taxes leviable on products and services.
- Full details of the seller and the buyer, details of the goods supplied including quantity, price per unit, total amount, shipping details such as country of origin and country of destination should be included in a commercial export invoice.
- A commercial invoice is required for shipments of any kind outside the European Union as it is a customs declaration provided by the exporter
- A commercial invoice is not required or countries within the European Union.
- Commercial invoices in European countries
- Tariffs, international commercial terms can be calculated by using a commercial invoice.
- It does not include any GST as the invoice is issued by a non registered business.
- Commercial invoices need to be certified by a Chamber of Commerce for some countries.
Importance of a Commercial invoice:
- Commercial invoice is a mandatory document in the import and export procedures and is an important part of the paper trail for transactions relating to exports and imports.
- It helps in maintaining records.
- A commercial invoice serves as a proof of sale and constitutes an essential part of the evidence that the sale transaction has taken place as it contains all the transaction details, including the details of the buyer, seller, and description and value of goods.
- A commercial invoice plays a vital role in ensuring payment for the same as it is a legal document evidencing a sale transaction.
- It acts as an assistance in verification as the importer can cross-check and verify the contents of the shipment in terms of quality, quantity and price to see if they correspond to the contents mentioned in the commercial invoice.
- A commercial invoice can also serve as a notice for payment due and can be used as a reminder for payments due as it contains all the details of a regular invoice.
- Customer relationships can also be maintained.
- There is no way the buyer can escape payment of the same as the commercial invoice is relatively detailed and can be used as proof.
Indian Laws on Commercial Invoices:
- Certain mandatory documents are required to be submitted as part of the import or export procedures for the CBIC.
- The commercial invoice is one among them as per Circular No. 01/15-Customs.
- A commercial invoice with packing list would fulfill the criteria required by the Customs authorities for proper import or export procedures as both documents have similar fields.
- Airway bill/bill of lading, Commercial invoice cum packing list and Shipping bill are required to carry out import and export activities as per the Foreign Trade Policy.
Time Limit for Raising a Commercial Invoice Under Indian Law:
- An invoice depicting the nature, quantity, and value of goods, the tax chargeable on those goods, and any additional necessary information must mandatorily issued by a registered taxable person who supplies goods subject to taxes as per the GST laws.
- The invoice has to be raised on or before the removal of goods for supply from the location of the supplier to the buyerif the supply involves the movement of goods.
- The invoice should be issued on or before the dispatch date of such goods.
Contents of a Commercial Invoice:
- Information regarding the buyer and seller including the name, address, tax information, and contact details of the buyer and the seller.
- Information regarding the transaction such as Date of the invoice, Invoice number, Order number, Description of the goods, Quantity and value of the goods, Mode of payment and related instructions, IEC Code and GSTIN and Country of origin.
- Shipping related information including Freight charges, Export route, Date of shipment, Gross weight, Number of packages and Insurance charges.
- The packing and shipping details will be included with the regular commercial invoice fields that may consist of Country of origin, Final destination, Gross weight, Number of packages, Export route/carrier, Loading port, Discharge port, Marks and number to ensure that there is ease of doing business and trade related activities.
Guideline to create an export invoice can be found here.
- Commercial invoice is an export document that acts as legal evidence of a sale transaction between the buyer and the seller.
- Commercial Invoice is a contract and proof of sale that is issued by the seller to the buyer which describes the goods being sold and details the price, value, and quantity of the goods.
- Commercial invoices need to be produced while shipping goods to international clients.
- Commercial invoice helps in the determination and assessment of duties and taxes payable.
- A commercial invoice is used as a customs declaration provided by the person or company that is exporting an item across international borders
- The full description of goods sold, their quantities, and value as previously agreed upon by the parties are mentioned in a commercial invoice.
- A few specific pieces of information such as the parties involved in the shipping transaction, the goods being transported, the country of manufacture, and the Harmonized System codes for those goods are usually included in the document.
- A statement certifying that the invoice is true, and a signature is often included commercial invoice .
- Commercial invoice is issued by the seller or the exporter to the buyer or the importer which acts as proof of sale.
- Commercial invoices are most commonly used by small businesses who sell products to consumers and where the payment has already been made for the goods.
- Commercial invoices used by small businesses serves as documentation for customs purposes.
- The Harmonized System is a method of classifying traded products used by customs authorities all around the world which them to assess the duties and taxes leviable on products and services.
- Full details of the seller and the buyer, details of the goods supplied including quantity, price per unit, total amount, shipping details such as country of origin and country of destination should be included in a commercial export invoice.
- A commercial invoice is required for shipments of any kind outside the European Union as it is a customs declaration provided by the exporter
- A commercial invoice is not required or countries within the European Union.
- Commercial invoices in European countries
- Tariffs, international commercial terms can be calculated by using a commercial invoice.
- It does not include any GST as the invoice is issued by a non registered business.
- Commercial invoices need to be certified by a Chamber of Commerce for some countries.
- Commercial invoice is a mandatory document in the import and export procedures and is an important part of the paper trail for transactions relating to exports and imports.
- It helps in maintaining records.
- A commercial invoice serves as a proof of sale and constitutes an essential part of the evidence that the sale transaction has taken place as it contains all the transaction details, including the details of the buyer, seller, and description and value of goods.
- A commercial invoice plays a vital role in ensuring payment for the same as it is a legal document evidencing a sale transaction.
- It acts as an assistance in verification as the importer can cross-check and verify the contents of the shipment in terms of quality, quantity and price to see if they correspond to the contents mentioned in the commercial invoice.
- A commercial invoice can also serve as a notice for payment due and can be used as a reminder for payments due as it contains all the details of a regular invoice.
- Customer relationships can also be maintained.
- There is no way the buyer can escape payment of the same as the commercial invoice is relatively detailed and can be used as proof.
- Certain mandatory documents are required to be submitted as part of the import or export procedures for the CBIC.
- The commercial invoice is one among them as per Circular No. 01/15-Customs.
- A commercial invoice with packing list would fulfill the criteria required by the Customs authorities for proper import or export procedures as both documents have similar fields.
- Airway bill/bill of lading, Commercial invoice cum packing list and Shipping bill are required to carry out import and export activities as per the Foreign Trade Policy.
Time Limit for Raising a Commercial Invoice Under Indian Law:
- An invoice depicting the nature, quantity, and value of goods, the tax chargeable on those goods, and any additional necessary information must mandatorily issued by a registered taxable person who supplies goods subject to taxes as per the GST laws.
- The invoice has to be raised on or before the removal of goods for supply from the location of the supplier to the buyerif the supply involves the movement of goods.
- The invoice should be issued on or before the dispatch date of such goods.
- Information regarding the buyer and seller including the name, address, tax information, and contact details of the buyer and the seller.
- Information regarding the transaction such as Date of the invoice, Invoice number, Order number, Description of the goods, Quantity and value of the goods, Mode of payment and related instructions, IEC Code and GSTIN and Country of origin.
- Shipping related information including Freight charges, Export route, Date of shipment, Gross weight, Number of packages and Insurance charges.
- The packing and shipping details will be included with the regular commercial invoice fields that may consist of Country of origin, Final destination, Gross weight, Number of packages, Export route/carrier, Loading port, Discharge port, Marks and number to ensure that there is ease of doing business and trade related activities.