The eminent arrival of VAT has bought a confusion of difference between commercial invoice & tax invoice for some professional tax consultancy services provider which actually is quiet strange. But not to worry, here’s a brief about variations in both commercial & tax invoices:
A commercial invoice is a bill of sale provided from seller’s end. It include details about goods sold, type of goods sold, quantity and price of each good and terms of sale. You can understand it as imperative documentation to determine true value of imported goods, assessment of duties and taxes in customs. Any commercial invoice must identify buyer and seller (in addition to other information), and clearly indicate details:
- Date and terms,
- Quantity, weight and volume,
- Packaging type,
- Complete description,
- Unit and total value,
- Applicable charges (insurance, shipping or other)
A tax invoice is a supplier issued document to display; amount charged for goods or services & base amount of goods and services on which tax is payable. It should be issued by a registered dealer or service tax provider, TIN (VAT) dealer, manufacturer, distributors; while commercial invoice is to be raised by any seller.
The term “Commercial” is only used to distinguish a invoice from other types; Excise or Tax Invoice etc. For example: Someone using Excise Invoice only for their purposes or if someone is using only a VAT Invoice (i.e. Tax invoice) so it’s not a commercial invoice? Yes both are commercial invoices.
But, as mentioned above to distinguish invoice from Excise or Tax invoice on the basis of which one can avail VAT (Input tax) Credit, and other invoices which cannot help to avail such credits, the term ‘commercial invoice’ is used.