Proforma Invoice: What It Is and What Goes On It

## What a proforma invoice is for A proforma invoice sets out a proposed transaction before the final invoice: who is supplying what, the expected price, quantities and commercial terms. It is useful when a customer needs a written cost summary before confirming an order or arranging an advance. Clearly label it “Proforma invoice — not a tax invoice”. A proforma is not a substitute for the tax invoice required for an actual taxable supply. Whether its terms form part of a binding agreement depends on the surrounding agreement and applicable law; do not assume the label alone settles that question. ## Fields to include Include supplier and customer details, a proforma reference, issue date and validity period. List descriptions, quantities, unit prices, currency, discounts and estimated tax where appropriate. State delivery assumptions, payment terms, expected timing and any exclusions. Keep proforma references separate from the final invoice sequence. ## A simple example For a proposed design project, list the agreed deliverables, number of revisions and project fee. If the proposed fee is ₹10,000, show that base amount, any tax estimated under the applicable rules, and the proposed payment schedule. State whether the fee includes or excludes tax. Avoid presenting an estimate as a verified tax calculation. ## What happens after acceptance When the transaction proceeds, issue the appropriate final documents at the time required by the relevant rules. Advances can have their own tax and documentation consequences, so do not use a proforma as the sole record of a received payment. Retain the accepted terms and reconcile references between the proposal, payments and final invoice. ## Can I use an invoice generator? Only use a layout that lets you clearly identify the document as a proforma and avoid misleading tax-invoice wording. Inspect the PDF before sending it. Adding a payment link or UPI QR code does not turn a proforma into a valid tax invoice. [Invoiceful](https://invoice.pracandy.com/) can help with invoice formatting, but confirm that your chosen document label and fields suit the intended purpose. Source: [HMRC explanation of proforma invoices](https://www.gov.uk/hmrc-internal-manuals/vat-trader-records/vatrec9010) describes the general distinction in the UK VAT context; Indian GST documentation follows the applicable Indian rules. ## Before you send it Invoiceful helps lay out an invoice; it does not determine your registration status, tax rate, place of supply, e-invoicing obligations or eligibility for input tax credit. Check the rules that apply to your transaction and ask your accountant when uncertain. A PDF or payment QR code is not proof of tax compliance. Sources: [CGST Act, section 31](https://cbic-gst.gov.in/hindi/CGST-bill-e.html), [CBIC invoicing FAQs](https://cbic-gst.gov.in/hindi/sectoral-faq.html), and the applicable CGST invoice rules.