Proforma invoice
A preliminary bill sent before the sale is final, to show the buyer what they will pay; it is not a tax invoice.
What it means in business
A proforma invoice states the items, quantities and prices a seller proposes. Buyers use it to get approval, open a letter of credit, arrange an advance payment or clear goods through customs. It does not record a completed sale and does not let the buyer claim tax credit.
Example
An exporter sends a proforma invoice to an overseas buyer, who uses it to arrange payment. When the goods ship, the exporter issues the commercial invoice and the other export documents. This is an illustration of normal business use rather than a quoted case study.
How to use it correctly
Mark the document clearly as a proforma so nobody books it as a sale or claims credit on it. Use a separate number series from tax invoices, and replace it with a tax invoice when the supply is made.
Common confusion
A proforma invoice is not a quotation, though they look alike: a quotation is an offer, a proforma asks for payment or approval against specific goods. And it is not a tax invoice, so it must not be entered in the sales register or the GST return.
Related glossary terms
Written on 24 October 2026 for lamp. Confirm the current rules with the official source or an adviser before relying on it.