Export Invoices: Types and Benefits

An export invoice is a document that contains a description of the items given by an exporter as well as the amount owed by the importer. Export invoices follows the same format as a regular tax invoice. However, export invoices contain additional information such as exporter and importer information, categories of export, shipping bill, and so on.
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Need for export invoices

1. Export invoices serve as a proof that a certain transaction occurred between two parties-buyer and seller on a specific date.

2. If a product is damaged during transportation, an export invoice lets the importer know where to claim insurance from.

3. Export invoices are required to prevent difficulties with the shipment and to ensure that the exporter has paid all applicable taxes and duties.

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Five types of invoices used in export

Commercial invoice

It is also known as 'Documents of Contents' because it generally contains all the information required for the preparation of all the other documents. There is no standard format for commercial invoices, but it normally contains the following-

1. Date

2. Name and address of buyer and seller

3. Order number/contract number/performa invoice number

4. Description, quantity and quality of the goods

5. Terms of sales

5. Port of shipment and destination

6. Value of the goods

Performa invoice

It is the first offer made by an exporter to a prospective foreign buyer. It mentions the kind and quality of goods, their value and other important information such as weight and transportation charges, etc. It is a preliminary invoice with a quotation and once accepted by the buyer, he acknowledges it by sending the purchase order.

Consular invoice

It is a certification provided by the consulate or embassy of a country to whom products are shipped overseas. The main objective of the invoice is to provide an accurate record of the type of products transported, their number, value, and so on, in order to assist duty determination in the importer's country. It also helps facilitate the inspection procedure in the importer's country because it has already been reviewed by the consular for the country.

Customs Invoice

Countries such as the United States, Canada, and others typically demand it. It must be completed in the format required by the Importer's country's Counsel office. The primary goal is to determine the customs import value at the port of destination. Other than the information provided in the commercial invoice, the seller must provide specifics such as freight value, insurance value, packaging expenses, and so on in a custom invoice.

Legalized Invoice

This is an invoice that has been legalized (stamped and attested) by the counsel of the importer's country, who is located in the exporter's country. The only difference between it and a consular invoice is that the legalized invoice is not in the prescribed format, but the consular invoice is. It is generally required by Middle Eastern countries.

Documents required in an export invoice

1. Name, address, and any relevant information, such as the exporter's GST number.

2. The importer's name, billing address, and shipping address

3. Product description, shipment type, and shipment cost

4. Harmonized Tariff Schedule(HTS) classification number

5. Date of issue of the invoice, invoice number and the total value of the invoice

6. Product's country of origin

7. Conversion rate value

8. Details of product's insurance

9. Signature of the exporter or the authorized person (physical or digital)

Types of Export

Export under Bond/LUT

Exporting goods or services without paying IGST is possible. Section 96A of the CGST regulations, 2017 details the provisions for exporters who want to export without IGST. When exporting goods or services without paying IGST, you must file a Letter of Undertaking.

Export with IGST

In contrast to the first option, the exporter must pay the IGST at the time of export and then claim a refund afterwards. A refund can be obtained for

1. The portion of the Input Tax Credit is utilized.

2. IGST paid on exported goods and services

SEZ with IGST

Certain relaxations of the export taxes that must be paid have been made in order to increase exports. The supply of goods to an SEZ is treated as a zero-rated supply, which means the taxes on the export need to be paid.

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