What is meant by Proforma Invoice?

What is Proforma Invoice? When Proforma Invoice is Prepared?

Hi guy’s

This Ravi Verma, in this blog we will discuss Proforma Invoice.

Let’s start,

What is a Proforma Invoice?

When any two companies import any goods/services between themselves, that company demands to issue Proforma Invoice because if the quality of service is not good then it can be revised anytime before full payment.

Because when a company delivers its goods/services to someone, estimating the quality of its goods/services to be of a very good standard, then the proforma invoice is demanded to check the quality of this service/goods.

Obviously, we can clear Proforma Invoice in such a way that if any company needs to check the quality of your goods/services, So he asks for Proforma Invoice from you because if the quality of your goods/service is not good then it can be amended anytime before full payment of invoice.

Can we count proforma invoices in real invoices?

We cannot enter Proforma Invoice in our Books of Account as it can be amended at any point of time due to which we cannot count it in a proper/Real Invoice.

What satisfaction do we get from Proforma Invoice?

Issuance of this invoice gives us the satisfaction that export of goods/services has been approved between any two companies but if the quality of those goods/services is not good then that challan can be amended at any time.

Can we collect ITC in GST from the proforma invoice?

No, we cannot bring performance invoice under GST as this invoice is issued to amend the quality of goods/service

Some important points of proforma invoice

  • Mention the Valuable Date
  • Mention The Accurate value
  • Mention the GST rate
  • Mention the Taxable Amount
  • Mentian the GSTIN number
  • Mentian the full address
  • Receive the same amount which you have mentioned in your proforma invoice.
  • Mention the correct SAC/HSN code

Note point****** It is very important to mention a valid date in any proforma invoice.