Home / Logistics Knowledge / Commercial Invoice: Purpose and Completion
A commercial invoice is the seller's record of sale to the buyer, setting out the goods, quantity, unit price, total, delivery terms, and the parties. On an export shipment it does three jobs at once: it is the buyer's basis for payment, customs' basis for valuation at both ends, and the tax authority's basis for the export rebate.
The invoice is issued by the seller and is the formal record of the transaction. Unlike a domestic tax invoice it has no VAT function. Its three roles are payment, valuation, and rebate calculation.
| Type | Issued | Main use |
|---|---|---|
| Proforma invoice | Before the deal is finalised or before shipment | Quotation, applying for a letter of credit, import permits, advance payment |
| Commercial invoice | After shipment, as the formal record | Payment, declaration, clearance, rebate, claims |
| Customs invoice | Submitted with the declaration | A destination-specific format some markets require |
A proforma invoice resembles a commercial invoice in structure but differs in legal effect. It is a quotation and application document that can be revised and carries no settlement force. A commercial invoice is the formal sale record and enters the settlement and declaration chain as soon as it is issued.
| Field | Content | What to check |
|---|---|---|
| Invoice number and date | Unique number, issue date | Number not reused; date consistent with the credit |
| Seller | Exporter's full name, address, contact | Matches the operating entity on the declaration |
| Buyer | Importer's full name and address | Matches the bill of lading consignee and the clearing party |
| Contract or order number | Reference | Allows both sides and customs to verify the transaction |
| Description and specification | Specific English description | Corresponds to the HS code |
| Quantity and unit | Quantity with unit of measure | Logically consistent with the packing list |
| Unit price and total | Price with currency stated | Matches the contract |
| Delivery terms | FOB, CIF, DDP and the named place | Consistent with the declared delivery terms |
| Country of origin | Made in China | Required by most destinations |
| Payment terms | T/T, L/C and so on | Matches the contract |
| Signature and seal | Exporter's signature | Follow the credit requirements on credit business |
The Incoterm determines what the price covers and therefore what the destination customs treats as the dutiable value. A CIF price includes cost, insurance, and freight; an FOB price covers only what is needed to get the goods on board. The difference changes the duty calculation at destination.
| Term | Price includes | Declaration note |
|---|---|---|
| FOB | Goods and pre-shipment costs | Freight and insurance sit outside the transaction price |
| CFR | Cost and freight | The declaration should reflect that freight is included |
| CIF | Cost, insurance and freight | The destination may assess duty on the CIF value |
| DAP | Delivered to a named place, excluding import duty | The declaration should name the delivery place |
| DDP | Delivered with import duty paid | Involves destination taxes, so the price is normally higher |
Invoice data is read by export declaration, destination clearance, and the export rebate. All three read the same source, so an inconsistency in any one of them triggers a review.
| Stage | Fields read | Consequence of a mismatch |
|---|---|---|
| Export declaration | Description, quantity, value, currency, delivery terms | Rejected entry, valuation query, rebate affected |
| Destination clearance | Description, value, origin, trade terms | Examination, revaluation, back duty and penalties |
| Export rebate | Value, quantity, export date, operating entity | Rebate held up or clawed back |
The seller's formal record of sale to the buyer, setting out the goods, quantity, unit price, total value, delivery terms, and both parties. It serves as the payment basis, the valuation basis for customs at both ends, and the basis for the export tax rebate.
A proforma invoice is issued before shipment for quotations, letter of credit applications, or import permits. It can be revised and has no settlement effect. A commercial invoice is issued after shipment as the formal record and enters the settlement and declaration process.
The content overlaps but the purpose and format differ. The commercial invoice is used for settlement and clearance generally, while a customs invoice is filed with the declaration in a format some importing countries prescribe.
Specific enough to match an HS code, for example stainless steel bolt or plastic kitchenware rather than hardware or general merchandise. A more specific description lowers the examination risk at both ends.
No. A difference disrupts both customs valuation and the rebate calculation. The invoice, packing list, and declaration must all carry the same figures.
Normally it carries the exporter's signature or seal. On letter of credit business, follow the credit terms, which may require the invoice to be signed by the beneficiary or to carry a specific marking.
Yes. The Incoterm determines what the price includes and therefore the dutiable value at destination. The declared delivery term must match the term stated on the invoice.
No. It is a trade document, not a VAT invoice, and it cannot support input tax deduction domestically. Domestic purchasing and export sales follow separate tax rules.
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