Proforma Invoice vs Tax Invoice (and Quotation): What's the Difference?

Last reviewed 22 Oct 2026

Quick answer

A proforma invoice is a preliminary bill that tells the buyer what they will be charged before the sale happens — for advance payments, approvals or import paperwork. It is not a GST tax invoice: it creates no GST liability and the buyer cannot claim input tax credit on it. Once the goods or services are supplied, you issue a tax invoice. A quotation (or estimate) is an earlier, non-binding price offer.

Quotation vs proforma invoice vs tax invoice

	Quotation / estimate	Proforma invoice	Tax invoice
Purpose	Price offer	Advance bill / commitment	Final bill for the supply
When	Before the order	After agreement, before supply	At or after supply
GST liability	No	No	Yes
Input tax credit	No	No	Yes (if eligible)
Recorded in accounts	No	No	Yes

Convert a quotation into a tax invoice

In Invoice Studio, create a quotation or proforma invoice, and when the customer confirms, use Convert to tax invoice. The customer, items and prices are copied into a new tax invoice with its own number — nothing is retyped.

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Frequently asked questions

A proforma invoice is not a tax invoice under GST. It creates no tax liability and cannot be used to claim input tax credit. Issue a tax invoice when the supply happens.

A quotation is a non-binding price offer made before the order. A proforma invoice is sent after the buyer agrees, often to request an advance payment, and lists the final terms before the actual tax invoice is issued.

Yes. Issue a new tax invoice with its own invoice number when the goods or services are supplied. Invoice Studio converts a quotation into a tax invoice in one click.

This guide is general information based on the CGST Rules, 2017 and the IGST Act, 2017. It is not tax or legal advice — rates, thresholds and notifications change, so confirm your situation with a chartered accountant or on the official GST portal (gst.gov.in / cbic.gov.in).