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Difference between Commercial Invoice and Tax Invoice

Surprisingly it is a teaser now a days to many tax practicing people.Prior to VAT there were no such two terms get confused, but VAT advent has brought home this strange.

Commercial Invoice may be understood as the seller’s bill of sale for the goods sold, specifying type of goods, quantity and price of each type and terms of sale.We can also call it as a document required by customs to determine true value of the imported goods, for assessment of duties and taxes. A commercial invoice (in addition to other information), must identify the buyer and seller, and clearly indicate the

(1) Date and terms of sale,

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(2) Quantity, weight and/or volume of the shipment,

(3) Type of packaging,

(4) Complete description of goods,

(5) Unit value and total value, and

(6) Insurance, shipping and other charges (as applicable)

Tax Invoice should be understood as a document issued by a supplier which shows the amount charged for goods or services as well as the amount of Goods and Services on which tax payable.

A tax invoice could be given by registered dealer may be service tax provider, TIN (VAT) dealer, CENVAT dealer (manufacturer, distributor, I or II stage dealers); while a commercial invoice can be raised by any seller.

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An invoice is an invoice. The usage of the term “Commercial invoice” is only to distinguish it from other types of invoices like Excise Invoice, Tax Invoice (in regard to VAT Invoice) etc.Assume for a while, I take only Excise Invoice for my purposes, is it not a commercial invoice? Or for that matter I take from the vendor only a VAT Invoice (i.e. Tax invoice) is it not a commercial invoice? Both are in all respects a commercial invoice.

But, as I said earlier, only to distinguish it from Excise or Tax invoice on the basis of which one can avail CENVAT Credit or VAT (Input tax) Credit, and other ordinary invoice on the basis of which such credits cannot be availed, the term ‘commercial invoice’ is being used.

Difference between Commercial Invoice and Tax Invoice

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