Guide To Prepare Error-Free & Customs-Approved Export Invoices
A compliance-proof export invoice or largely referred to as the commercial invoice is extremely important and one of the most critical documents if you wish to export any goods out of the country. This is the single most important document that captures the entire transaction from the beginning to the end. An error-free export invoice can ensure that the consignment passes through without any unnecessary delays which might end up causing considerable financial and business loss.
Many exporters, especially those who are new, don’t grasp the importance of an accurately prepared export invoice and they end up including fewer details than they should have. They operate under the impression that the details they provide for domestic sales are enough for an international export as well and they realize their mistake only when it’s too late.
A properly laid out export invoice provides the necessary information to the various parties such as the buyer, the freight forwarder, the bank, the customs, and all the other parties engaged in the transaction. If not done properly, it can lead to confusion, which will inevitably lead to delays, and in the worst case, it may even lead to a disagreement that could cost an exporter a fortune.
Most of the requirements of an export invoice are the same as a GST invoice with just a few additional adjustments. Today we’ll be looking at the components of an export invoice that you should pay special attention to, which will ensure that everything is done perfectly the first time around.
So, let’s get to it and find out what goes where in an export invoice. This exhaustive list can serve as a guideline for all your future requirements, and a benchmark to refer to if you have any doubts whatsoever.
Shipper name, address, and GSTIN: The basic details of the exporter/shipper which is you. However, displaying the GSTIN is voluntary on the commercial invoice document.
Invoice Number: A plain old serial number that could be a combination of letters, digits, and special characters. The length of your invoice number can’t exceed 16 characters. Eg. EXP/001/21-22
Date of Issue and the Due Date: Again, this is non-mandatory, but rather a good practice.
These are the basic components that are present in a GST invoice as well as the export invoice or largely known as Commercial Invoice. Now, let us look at the components that are specific to an export invoice to give you a better idea.
Consignee Details: These details encompass everything related to the receiver including their entity name, entity address, phone numbers, and any other relevant personal details.
Buyer Details: These details are mandatory only if the consignee and buyer are two different entities. It includes the entity name, address, contact details, and other relevant information.
Notify Party Details: The party that’s notified as soon as the shipment arrives is the Notify Party and this section includes their contact details and address.
Shipping Details: These details cover various subsections explained below.
Dispatch Method: This is the mode of transportation that’s been used by the exporter to send the goods and could include air, sea, land, or even rail.
Country of Origin: The name of the country from where the exporter is sending the goods.
Final Destination: Also known as the Place of Supply, this is the name of the destination country where the goods are being sent.
Vessel/Flight Number
Port of Loading: Also known as the Port of Exit, this is where the goods are loaded aboard the ship.
Port of Discharge: Port where the goods are unloaded from the ship.
Type of Export: Non-mandatory for the Commercial Invoice, compulsory to mention on the Export GST Invoice or Export INR Invoice. Depending on the transaction, you can choose the following option:
Export Under Bond/LUT: This includes the supply of both goods and services under bond/letter of undertaking without paying the IGST.
Export With IGST: This applies to any exporter who supplies their goods and services by paying IGST and wishes to claim a refund.
Shipping Bill Details: This includes various other details that are not mandatory to mention for creating an export bill but are mandatory for claiming an IGST refund. The various details that can be added under this section are:
Shipping Port Code
Shipping Bill Date
Shipping Bill Number
Additional Information: This section includes all the reference numbers and any other additional information deemed necessary; the relevant subsections are listed below.
Bill of Lading Number: A bill of lading is the contract of carriage of goods between the exporter and the shipping line. The number is usually assigned by the shipping line and is used for tracking the movement of the goods.
Terms of Delivery: A detailed part of a contract that defines the point from which the risk of loss of merchandise is transferred from the exporter to the buyer. This includes typically the agreed INCO term or international commercial terms widely accepted by the International Chambers of Commerce. E.g., FOB, CIF, C&I, C&F, etc.
Method of Payment: There are different methods for collecting the payment including cash in advance, letters of credit, and more.
Product Details: These are the details of the goods being supplied and their components are explained below.
Container Number or Marks & Nos.: This number is printed on the freight containers and is used for reference purposes.
Product Code: A unique reference number for each type of product.
Description of Goods: A detailed description of the goods supplied.
Net Weight: The weight of the shipment excluding its packaging.
Gross Weight: The entire weight of the shipment including the packaging.
Price per Unit: The price of every single unit of the goods shipped.
Total Value: The total value has to be mentioned in both INR as well as the currency selected by the receiver.
Currency of Transaction: The preferred currency is decided before initiating the contract.
HS Code: Also known as the Harmonized Commodity Description and Coding System, this code is used internationally to declare the goods to the customs for easier and reporting.
BIN/IEC Number: The Business Identification Number and/or the Importer Export Code (IEC) is a 10-digit code assigned to exporters and importers in India by the Ministry of Commerce.
PAN Number: The Permanent Account Number is a 10-character alphanumeric identifier issued by the Government of India to bring a universal identification to all financial transactions and prevent tax evasion.
Bank Details: This includes the details of the shipper’s bank account and the branch details as well.
Additional Remarks: It is always a good practice to add any relevant or necessary information within the additional remarks section which as a shipper you want to disclose or update to your buyer, or in general wish to put it up on the commercial invoice document.
Signature: A digital or physical signature is necessary on the export invoice to authenticate its validity. Exporters using software like for e.g., Xport-Pro can add a disclaimer stating “This is a computer-generated document. No signature is required”.
These are the most critical details that you shouldn’t forget to furnish in any case. It’s up to you if you want to add more details so that the chances of being non-compliant are minimized. However, these bare minimum details are an absolute must in any case.
You can find various pre-built formats on the internet to make your export invoices, there are all sorts of options available ranging from free to premium paid ones. One such industry-leading software application is Xport-Pro, which assures compliance-proof export documentation, for every shipment, every single time. Once you get the hang of it, the process of creating an export invoice or any other export-related documents becomes relatively seamless, taking out the element of uncertainty once and for all.
Click here to view all the sample export documents.