Proforma invoice vs tax invoice: when to use each (India guide)

Quick frame: A proforma invoice is a pre-supply commitment — a quote-with-terms used to take advances. A tax invoice is the GST document raised on or after supply, on which the buyer claims input tax credit. They are not interchangeable. Make a proforma in 60 seconds with the Proforma Invoice Generator.

What each document does

	Proforma Invoice	Tax Invoice
When	Before supply	At/after supply
Purpose	Quote + take advance	GST compliance, ITC
Legal status under GST	Not a "tax invoice"	Mandatory under Sec 31
Series	Internal (PI-2026-0001)	GST-mandated continuous
ITC for buyer	No	Yes
Rule reference	None	Rule 46, CGST Rules

When to use a proforma invoice

• Advance / deposit billing — buyer wants to release a part-payment before goods ship.
• Imports / exports — customs needs a value declaration before shipment.
• Government / PSU buyers — often request proforma to load into their PO system.
• Project-based services — to lock in scope + price before kick-off.

When NOT to use a proforma invoice

• After supply has happened — the tax invoice is mandatory under Section 31 within the prescribed time.
• For B2C transactions where the buyer just wants a bill — issue a tax invoice (or bill of supply if you are not GST-registered).
• For statutory needs (TDS deduction, audit trail) — the proforma is invisible to your books.

What goes on a tax invoice (Rule 46)

The CGST Rules mandate every tax invoice contains: supplier name, address, GSTIN; serial number; date; recipient name, address, GSTIN; HSN/SAC codes; description, quantity, unit, total value; taxable value, GST rate, tax amounts, place of supply; and signature (digital or physical).

A proforma can omit GSTIN of the recipient, HSN, and the strict serial — though best practice is to include them anyway.

Common mistake: serial-number cross-pollination

Some businesses reuse one serial across both proformas and tax invoices. Don't. Keep two separate series:

• Tax invoices: INV-2026-0001 onwards (continuous, no gaps)
• Proformas: PI-2026-0001 onwards (your own logic)

This makes audits painless. Gaps in the GST series invite questions.

Replacing a proforma with a tax invoice

When supply happens, raise a fresh tax invoice referencing the proforma. State on the tax invoice: "This tax invoice supersedes Proforma Invoice PI-2026-0042 dated …. Amount of Rs. … received in advance is adjusted against this invoice." Keep both documents linked.

Related tools

• GST Invoice Generator
• Quotation Generator
• Cash Receipt Generator — when you receive the advance

Q. Can a buyer claim input tax credit on a proforma invoice? A. No. ITC requires a tax invoice that satisfies Rule 46. Without it, the buyer cannot claim GST.

Q. Is GST payable when I issue a proforma invoice? A. Not at issuance. GST liability arises at the time of supply (or on advance receipt for services — see Section 13 of the CGST Act).