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Invoice pro forma12/27/2023 ![]() ![]() Since, it is not a sales bill, it is not recorded in accounting by seller or buyer. If it has heading Sales invoice then it becomes a legal document under GST. Proforma invoice should contain heading like “Pro Forma Invoice”. And seller is not required to pay GST on pro forma invoices issued. It is not required to be reported under any GST returns, either by buyer or seller. GST act does not contain any term such as pro forma invoice. Pro forma invoice is not an actual invoice and therefore is not a legal document. Normally such practice is adopted in vehicle showrooms. So they first issue pro forma invoice, buyer makes payment on its basis and then they issue the invoice. Some businesses also has the practice that invoice is only issued after receiving payment. If he has any objection, he can tell before issue of invoice and thus invoice need not be revised. It is issued before the issue of a final invoice, so that buyers get aware of the price, quantity, additional charges and terms/conditions. ![]() “Pro forma” is a Latin term, literally means “for the sake of form” or “as a matter of form”? Why Pro forma invoices are issued? It states the prices and quantity of the goods/services, taxes applicable and also state other charges like delivery charges. Pro forma Invoice is a document similar to invoice regarding the particulars of the goods/services yet to be delivered to the customer.
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