How to create a proforma invoice in India (format + when to use it)
A proforma invoice is a commitment to supply at a stated price, used to collect an advance or get the buyer's purchase approval before you raise the actual tax invoice.
Step 1: Label it clearly as PROFORMA INVOICE
The word PROFORMA must appear so it is not mistaken for a tax invoice. It does not entitle the buyer to claim input tax credit, so labelling protects both sides.
Step 2: Add seller and buyer details
Your business name, address and GSTIN, then the buyer's name, address and GSTIN. Include a proforma number and date.
Step 3: List goods or services with tax
Description, HSN or SAC, quantity, rate, GST rate and the tax split (CGST plus SGST or IGST). Show the grand total the buyer will pay.
Step 4: Add validity and payment terms
State how long the price holds and the advance you expect. Mention that a tax invoice will follow on supply.
Step 5: Convert to a tax invoice on supply
Once payment or the order is confirmed and you deliver, raise the actual GST tax invoice. That invoice, not the proforma, is what goes into your GST return.
Frequently asked questions
Can I claim GST on a proforma invoice?
No. Input tax credit can only be claimed on a valid tax invoice. The proforma is a pre-sale document, so wait for the tax invoice.
Is a proforma invoice legally binding?
It is a good-faith quote of price and terms, not a demand for payment or a record of sale. It becomes binding as a transaction only when you issue the tax invoice.
When should I use a proforma invoice?
Use it for advance payment requests, export orders, or when a buyer's finance team needs a formal document to approve a purchase before you supply.