How to Make a Proforma Invoice: Format, When to Use It, and What to Avoid

A proforma invoice looks like an invoice and does almost none of the things an invoice does. It states what a supply will cost, in the format the client's accounts team expects, before the supply has happened — which is precisely why it creates no GST liability for you and no input tax credit for your buyer.

It sits between a quotation and a tax invoice: firmer than an offer, but not yet a demand for payment on a completed supply. If you want the full comparison of all three, we've covered that here.

When Indian businesses actually send one

Four situations account for nearly all of it:

The client needs to pay in advance. Their finance team can't release money against a quotation, but they can against a proforma. It carries the bank details, the exact amount and an invoice-shaped layout without being a tax invoice.

Internal approval or a PO. Larger buyers need a document to route through approvals and raise a purchase order against. A proforma gives them one without committing you to a tax point.

Exports and customs. A proforma is routinely used for customs documentation, opening a letter of credit, and shipping paperwork before the commercial invoice exists.

A long gap between agreement and supply. Custom manufacturing, anything with a lead time — the client wants the numbers locked and documented well before you can legitimately raise a tax invoice.

What goes on a proforma

Most of a tax invoice, minus the tax-document status:

Include	Why
Heading "Proforma Invoice"	The one piece of labelling that keeps it out of trouble
A proforma number and date	For reference and for the client's approval trail
Your details and GSTIN	The buyer needs to know who they're dealing with
Buyer's details and GSTIN	And it's what decides CGST/SGST versus IGST
Itemised lines with rates	Same detail the eventual tax invoice will carry
Tax shown separately	So the buyer knows the real total they're approving
Your bank details	The main reason they asked for it — they want to pay
Validity or expected supply date	Prices shouldn't be open-ended

The one thing it must not look like

A proforma must not read as a tax invoice. This is where people get into trouble.

If your document is headed "Tax Invoice", carries an invoice serial from the same series you report in GSTR-1, and looks identical to the real thing, then you've effectively issued a tax invoice. Your buyer's accounts team may try to claim input tax credit on it — and when that credit is reconciled against your actual GSTR-1 filing and isn't there, it gets reversed. Now the client has a problem, and it's your document that caused it.

Three rules keep it clean:

1. Head it Proforma Invoice, never "Invoice" or "Tax Invoice".
2. Number it in its own series, separate from your tax invoices.
3. State plainly on the document that it is not a tax invoice.

Point three is worth doing even though nothing obliges you to. It takes one line and removes all ambiguity for whoever in the client's office picks the document up.

Making one in CredHill

Open Create Proforma, pick the client, add items, save. What you get:

• Its own number series — PI/2026-27/001 — kept separate from your tax invoices, so your invoice sequence stays unbroken where it matters.
• The line "This is not a tax invoice." printed on the document automatically. You don't have to remember to add it, and it can't be left off by accident.
• CGST/SGST or IGST resolved from the two GSTINs, same as an invoice, so the total the client approves is the total you'll eventually bill.
• Bank details and UPI QR on the document if you've set them up in your profile — which is usually the whole reason the client wanted a proforma.

Converting it to a tax invoice

When the supply actually happens, the proforma becomes a tax invoice in one click. Items, taxes and client details carry across, and the invoice gets a number from your real invoice series — the one that goes into GSTR-1.

The proforma is marked converted and linked to the invoice it became. That link matters more than it sounds: it's how you avoid billing the same supply twice, and how you can answer "did we ever invoice this?" without opening three spreadsheets.

If the client pays against the proforma before you supply, record that payment on the invoice once it exists — including any TDS they deducted.

The short version

• A proforma is a pre-supply document: no GST liability for you, no input tax credit for the buyer.
• Send one when the client needs to pay in advance, route an approval, raise a PO, or clear customs.
• Head it "Proforma Invoice", number it in its own series, and say on the face of it that it isn't a tax invoice.
• Convert it rather than recreating it, so the tax invoice can't disagree with what the client approved.

Not tax advice. Proforma invoices aren't defined under GST law — the practice above is commercial convention. For exports, letters of credit or anything customs-related, check with your CA or customs broker.