What is Commercial Invoice?
One of the most important documents for shipping, a commercial invoice provides essential information about the freight. It is mainly used by the customs authorities to classify the goods correctly and calculate duties and taxes.
It is a legal document provided by the seller to the buyer as “proof of sale”. The invoice must be presented by the buyer at every point during freight shipping, especially during customs declaration.
Specification of Commercial Invoice
A commercial invoice contains all the basic information about the freight like:
- Details of the seller (Name, address, phone number, Tax ID number)
- Details of the buyer (Name, address, phone number, Tax ID number)
- Shipping Date
- Invoice Number
- Bill of Lading Number
- Origin & Destination
- Description of Goods
- Quantity of Goods
- Value of Goods
- Net & Gross Weight
- Country of Origin
- Insurance
- HS Code
- Incoterms (as per the country of export)
- Mode of Transportation
- Reason for Export
- Terms of Trading, etc.
The document must contain the words “invoice” in the format. It should also specify that “the information provided in this invoice is accurate and correct” along with the signature of the seller and/or company stamp.
Make sure to cross-check the country-specific requirements for the commercial invoice.
An invoice is required by the customs to calculate the taxes, shipping tariff, and duties levied on the freight while shipping. Without a commercial invoice, your freight cannot be cleared by customs. Each shipment must have a separate commercial invoice.
Commercial Invoice v/s Bill of Lading
A commercial invoice is different from a Bill of Lading (BoL) as it does not show ownership of the goods or carry a title to the goods sold. Instead, it acts as an evidence of commercial transaction between the said parties for assisting verification of goods during shipping. It can also be helpful for payments via Letter of Credit (LoC) and may need to be presented to the bank for releasing funds to the seller.
When shipping freight, make sure to provide a complete commercial invoice with accurate details. If not, your shipment can be held up during the customs clearance processes, leading to unexpected delays and resulting penalties. If the information provided is found to be incorrect or misleading, it can have severe legal consequences too.
On the contrary, having a complete and correct commercial invoice saves you from unwanted hassles and speeds up the entire customs clearance process.
Terms related to Commercial invoice
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