Proforma invoice

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

17 October 2015 One vendor submitted Proforma invoice which we submitted excise dept. for CT-3 issue for EOU.

But while in original invoice they made changes in consignee name .

Whether any changes between proforma invoice and Original Invoice is acceptable?

CA AnKiT BoHrA (AB)

CA AnKiT BoHrA (AB) (Expert)
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17 October 2015 in my view.. it wont b .. stil wait for more expert comments

Querist : Anonymous

Querist : Anonymous (Querist)

17 October 2015 Please review the same and confirm.

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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10 August 2024 The changes between a proforma invoice and the original invoice, especially concerning the consignee name, can be significant in the context of excise and taxation procedures. Here's a detailed explanation of the implications and the acceptable practices:

### **1. **Purpose of Proforma Invoice**

- **Proforma Invoice**: A proforma invoice is a preliminary invoice sent to the buyer before the actual sale takes place. It outlines the details of the sale, including the product, quantity, price, and terms. It is typically used for obtaining approvals, such as in the case of issuing a CT-3 certificate for an Export Oriented Unit (EOU).

### **2. **Impact of Changes**

- **Consistency**: The original invoice should ideally match the details provided in the proforma invoice, particularly in terms of key details like the consignee's name. Any discrepancies may raise concerns about the validity of the transaction, compliance with regulations, or the accuracy of records.

- **Excise and Taxation Compliance**: For tax and excise purposes, any changes between the proforma invoice and the original invoice should be carefully documented. The excise department or tax authorities rely on accurate and consistent documentation for verification and compliance purposes.

### **3. **Acceptability of Changes**

- **Regulatory Acceptance**: Changes in the consignee's name or other details between the proforma and original invoice may be acceptable, but they must be justified and documented. It's crucial to understand the specific regulatory requirements related to your situation and industry.

- **Documentation**: Any changes should be accompanied by proper documentation and explanations. For instance, if the consignee's name has changed, provide a clear explanation for the discrepancy and ensure that all relevant parties are informed.

- **Verification**: Ensure that the final original invoice aligns with the contractual agreements and purchase orders. It may be helpful to have the vendor issue a revised proforma invoice reflecting the changes before generating the original invoice.

### **4. **Steps to Address Changes**

1. **Clarify with the Vendor**: Contact the vendor to understand the reason for the change in the consignee's name and request an explanation. Ensure that the vendor provides a revised proforma invoice if necessary.

2. **Update Documentation**: If there are legitimate reasons for the changes, update all related documentation accordingly. Ensure that the original invoice, as well as any supporting documents, reflect the correct details.

3. **Communicate with Authorities**: Inform the excise or tax authorities about the discrepancy between the proforma and original invoice. Provide any additional documentation or explanations required to validate the changes.

4. **Review Compliance Procedures**: Ensure that your procedures for handling proforma and original invoices are robust to prevent such discrepancies in the future. Regular audits and reviews can help maintain consistency and compliance.

### **5. **Regulatory Guidelines**

- **Excise and Customs Guidelines**: Review the guidelines provided by the Central Excise Department or other relevant regulatory authorities for specific instructions on handling discrepancies between proforma and original invoices.

- **Legal and Tax Advice**: Consult with a legal or tax professional to ensure that you comply with all relevant regulations and handle discrepancies appropriately.

### **Summary**

Changes between a proforma invoice and the original invoice, such as the consignee's name, can be acceptable but require careful documentation and justification. Ensure that any discrepancies are addressed and communicated with the relevant authorities to maintain compliance and avoid issues.