GUIDE TO: Commercial invoices
The commercial invoice is a demand by the seller to the buyer for payment in accordance with goods provided as specified in the sales contract.
The commercial invoice is a serious document to any Customs or border officer, as it is sufficient proof that the buyer and seller did agree to the price charged for the said goods or service invoiced.
Let’s look at what is required and included in this document.
The pro-forma invoice
A pro-forma invoice is a statement provided by the seller for goods to be provided by seller. The proforma invoice may be used as a quote or be requested by the buyer in order to obtain an import permit, raise finance or simply check the details that would appear on the commercial invoice. It is not in itself sufficient for an import or export clearance to happen.
The commercial invoice
To be compliant for Customs purposes, a commercial invoice must correlate to the goods it accompanies, and include the following information:
Details of the seller – This may or may not be the exporter.
Details of the buyer – This may or may not be the importer.
Information about the goods – This includes a description of the goods, the quantity, the origin and the value. Technically the tariff (HS) code of all goods must also be provided on the commercial invoice. If it is not, Customs will assign tariff codes at their discretion which will determine the tax payable for import clearance.
The terms of delivery – Incoterm
The terms and methods of payment – The terms of payment may not fall outside of what is allowed by the SARB exchange control guides.
Freight details – This includes the name of the carrier or carriage provider, the cost of freight and the cost of cargo insurance.
Shipment details – The points of departure and destination (which may or may not be the Incoterms point of delivery)
Packing Specification – The number and kind of packages, sizes, weights, marks and numbers. This information may be given on a separate auxiliary document call the packing list.
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Types of commercial invoices
The exporter is faced with producing a variety of different invoices depending on import customs requirements. Because the export invoice is of such importance to the overseas Customs authorities, it is they who insist on a particular format. The export invoice falls into five distinct types.
- Standard commercial invoice.
- Commercial invoice with a declaration.
- Commercial invoice requiring third party verification.
- Consular invoice.
- Specific Customs invoice.
1) The standard Commercial invoice:
The simplest and most common situation is one where the importing country has no special requirements. The exporter uses the company’s standard commercial invoice, and include the above mentioned information. The invoice may also be zero-rated for vat. Use this form of invoice unless other requirements have been submitted to you by the importer or clearing agent.
Below is a typical layout for a standard commercial invoice. You may download a typeable version of this to use for your exports by clicking here.
2) Commercial invoice with declaration
It is quite common for countries to require a declaration to be typed on the invoice. The wording differs from country to country, and is often in the language of the importing country, but invariably declares the origin of the goods and that the prices are correct export prices.
If the seller makes a false declaration to help the buyer escape responsibilities and obligations, such as putting a lower taxable value on the invoice than what is actually paid, the seller is party to fraud.
A typical declaration would be: “ We hereby guarantee that this is a true and correct invoice and that the goods referred to are of the origin, manufacture and production of South Africa”.
3) Certified commercial invoice
The above declaration sometimes requires a third party to validate it and the content of the invoice. The most common required third party would be the Chamber of Commerce. They will stamp the documents with their own certification stamp. What they certify in practice is that the signatory of the invoice is one authorized by the company to make such declarations on behalf of the company. Exporting companies lodge the signatures of approved signatories with the Chamber for this purpose.
In some cases, there is a requirement for invoices to be certified by the commercial section of the embassy of the importing country, in the country of export. The procedure may be that the exporter arranges certification at the Chamber of Commerce and then presents the documents to the appropriate embassy.
4) Consular invoice
Some countries require their own, unique, consular invoice form to be completed and returned to the Consulate for legalization. The format of such invoices varies enormously and they are often in the language of the country of import. It is possible that the consular fees could be quite high, sometimes even a percentage of the invoice value. It is perfectly acceptable to show consular fees as a separate item on the pro-forma invoice quotation.
5) Specific Customs invoice
These invoice forms are particularly related to ex-Commonwealth countries however it is not that common any more. The exporter must complete the appropriate invoice form for the country of destination, which are available from specialist printers.
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