Invoice

Export Invoice - Complete Explanation

An Export Invoice is a legal document that serves as a request for payment from the exporter to the buyer. It is issued once the goods have been shipped or services have been rendered, confirming the final cost of the products or services. The Export Invoice contains essential details about the shipment, including product descriptions, prices, payment terms, delivery terms, and the payment amount due. It is a crucial document for customs clearance, taxation, and trade compliance.

Key Components of an Export Invoice:

1. Exporter & Buyer Information:
   This includes the contact details of both the exporter (seller) and the buyer (importer), including:
   
   

   • Name, address, phone number, and email

   • GST/Tax Identification Number (TIN)

2. Invoice Number & Date:
   The Export Invoice must have a unique invoice number and the date of issuance for identification and record-keeping purposes.
   
   

3. Description of Goods:
   A detailed breakdown of the goods or services being sold, including:
   
   

   • Product name and description

   • Quantity and unit of measure (e.g., kg, pieces, cartons)

   • Unit price (cost per item)

   • Total price (quantity × unit price)

4. Total Invoice Value:
   The total amount due for the shipment, which may include:
   
   

   • Product cost

   • Taxes (e.g., VAT, sales tax)

   • Shipping, insurance, and handling costs (if not covered under Incoterms)

5. Payment Terms:
   The agreed payment conditions, such as:
   
   

   • Advance payment

   • Letter of Credit (L/C)

   • Cash on Delivery (COD)

   • Open Account (payment due after a certain period)

6. Delivery Terms (Incoterms):
   The delivery and risk-sharing terms, such as:
   
   

   • FOB (Free on Board): Seller delivers goods to the port, buyer assumes responsibility for the shipment thereafter.

   • CIF (Cost, Insurance, and Freight): Seller covers shipping, insurance, and freight until the destination port.

   • EXW (Ex Works): Buyer takes full responsibility for shipping from the seller’s premises.

7. Shipping Details:
   Includes information about the shipping method (air, sea, road, etc.), port of departure, port of destination, and expected delivery date.
   
   

8. Bank Details:
   The exporter’s banking information for payment processing, including:
   
   

   • Bank name, address, account number, and SWIFT/BIC code.

9. Terms of Sale:
   This specifies the sales contract’s terms, any discounts applied, and the payment due date.
   
   

10. Signature:
    The export invoice typically includes an authorized signature from the exporter, confirming the validity of the invoice.
    
    

Key Differences:

1. Purpose:
   
   

   • Proforma Invoice is a preliminary document used to outline terms, serve as a quotation, or assist in financing arrangements.

   • Export Invoice is a final document for requesting payment after shipment.

2. Timing:
   
   

   • Proforma Invoice is issued before the goods are shipped.

   • Export Invoice is issued after the goods have been shipped or delivered.

3. Binding Nature:
   
   

   • Proforma Invoice is a non-binding document, mainly serving as an estimate or preliminary agreement.

   • Export Invoice is binding and must be paid as per the agreed terms.

4. Customs and Taxation:
   
   

   • Proforma Invoice is typically used to get import permits, financing, or L/C approvals.

   • Export Invoice is used for customs clearance, to calculate taxes and duties, and to complete the trade transaction.

Summary

• A Proforma Invoice (PI) is issued before the shipment as a quotation, whereas an Export Invoice is issued after the shipment as a request for payment.

• The Export Invoice is legally binding and used for customs clearance, whereas the Proforma Invoice helps in financing and initial negotiations.

Both documents are critical in international trade, but their uses and timing differ depending on the stage of the transaction.