Sandipan Mitra is the CEO and co-founder of Pice. He boasts eight years of experience in the B2B and fintech sector. Sandipan's journey includes significant roles at multiple Indian Unicorns Including Product at PayU, and as founding member / VP, Product at Open Financial Technologies.
It validates the transaction between exporter and importer and helps customs authorities determine applicable duties, taxes, and compliance with trade regulations.
Sellers are required to submit it to destination-country customs for clearance, ensuring timely delivery and avoiding delays in processes like Input Tax Credit (ITC) claims.
As per India’s Foreign Trade Policy (1992), the invoice must list exporter/importer details, shipment quantity, net weight, unit price, HS codes, country of origin, and a declaration of accuracy.
Filling out all sections accurately, from company details to shipment descriptions and reference numbers, helps prevent compliance issues and trade delays.
A customs invoice serves customs and taxation purposes, while a commercial invoice serves as a legal sales document for payment and accounting between buyer and seller.
Whenever a seller exports goods, they must comply with the customs regulations of the destination country. With the Indian export market projected to exceed $1 trillion in FY26, all GST-registered companies must strengthen their legal policies and distribution strategies to capitalise on this growth.
Ensuring that all stages of the export process are completed correctly can be complicated. It is strictly essential to maintain the correct set of shipping documents, including a customs invoice, to avoid unnecessary delays. Along with other essential paperwork like a Proforma Invoice or Commercial Invoice, this is a crucial piece of document that enables quick clearance of shipments.
In this blog, you will learn in detail about what is a customs invoice and confirm its applicability.
What is a Customs Invoice?
A customs invoice officially validates the international transaction of goods between an importer and an exporter. If you send goods to another country, they must be inspected by that country's customs authorities to determine the applicable duties and taxes.
The standard format of a customs invoice addresses the most pertinent queries of customs agencies and meets customs clearance requirements. Therefore, it enables international shipping providers for businesses to deliver goods to the intended destination more quickly.
When Should You Use a Customs Invoice?
When a supplier completes the customs invoice correctly, it ensures that the delivery is completed on time. Although incomplete or incorrect invoices do not always cause payment delays, GST procedures such as claiming ITC could be delayed by up to 90 days.
Consequently, sellers must use a customs invoice every time they make international shipping arrangements. This document needs to be handed over to the customs authorities of the destination country so that they can calculate the total Customs Duty, import tax, or other fees for taxes purposes.
What Information is Compulsory on a Customs Invoice?
According to the Foreign Trade Policy of 1992, customs invoices issued in India must include the following customs invoice requirements:
Trade name and address of the shipping agency and consignee
Brief description of the exported goods
Quantity of goods to be delivered (Shipment Pieces)
Net weight of the products
Unit price
Total price, including Freight and Insurance Charges
Respective Harmonized System codes
Invoice number
Country of origin of the goods
Moreover, there is a declaration section at the end of a customs invoice, often referred to as a Customs Declaration, to confirm that all the above-stated information is correct to the best of the shipper’s knowledge.
How to Fill Out a Customs Invoice?
Fueled by 10-digit active IEC codes, Indian exports have already surpassed $800 billion in the 2024 calendar year. Therefore, regardless of the total invoice value or the type of goods you deal in, if you are involved in exports, merely knowing what is a customs invoice will not be sufficient.
As per clear directives from the Directorate General of Foreign Trade (DGFT) portal, you must implement the correct procedure for completing the customs invoice to avoid compliance discrepancies with trade regulations, import regulations, and export requirements. Here's how to do it:
Step 1: Add Your Company Details
You must include your company’s official trade name and address, along with the shipping firm’s details, at the top of the invoice. Following this, the relevant tax identification numbers and contact information should be provided. All these details should also be included for the intended recipient. Many delivery service providers and customs brokerage firms assist in preparing such commercial invoices to match compliance norms.
Step 2: Add Buyer’s Specifications
If the buyer is not the same as the recipient of the goods, their details must be provided separately on your customs invoice. Additionally, you can enter the buyer’s tax identification number once you have received the relevant details.
Step 3: Allocate a Unique Reference Number
A separate invoice number or reference ID has to be included with every shipment. Accordingly, the seller is required to mention it on the customs invoice. This element proves extremely useful when tracking your order or collecting any outstanding payment.
Step 4: Mention the Correct Dates
For smooth customs declaration and customs clearance requirements, you must include the date on which your company received the order. In addition, the shipping date must also be provided.
In a few instances, orders are placed well in advance, sometimes up to a year or several months beforehand. In such cases, it is good practice to specify the shipping and order receipt dates separately to avoid any confusion.
Step 5: Include Descriptions of Your Goods
Customs invoices must include detailed information about the items in the shipment. This includes the names of the individual products, their values, purposes, and the materials used to produce them. The latter information is necessary to determine whether the goods are heavy, toxic, fragile, and so forth.
Additionally, you can attach serial numbers to each of your shipped items, as this information can come in handy in the event of theft.
Step 6: Verify the Mentioned Details
It is essential to reconfirm the precision of all the details submitted. If you are satisfied with the content of your customs invoice, sign the form and present it to the rightful customs department for customs declaration.
Customs Invoice and Commercial Invoice Compared: Which One Do You Need?
Aspect
Customs Invoice
Commercial Invoice
Purpose
Used primarily for customs declaration and to help customs authorities assess duties and taxes, Customs Duty, and other fees for taxes purposes.
Serves as a sales document between buyer and seller, indicating the agreed price and payment terms for goods or services.
Primary Audience
Customs officials in the importing country.
Buyer or importer of the goods.
Content Focus
Includes detailed shipment information such as country of origin, Harmonized System codes, Shipment Pieces, Freight and Insurance Charges, and customs invoice requirements.
Contains product descriptions, quantities, unit prices, total value, and payment instructions.
Legal Requirement
Mandatory for international shipping to comply with customs clearance requirements and import regulations.
Not always legally required, but essential for commercial transactions and accounting records.
Format
Structured to meet trade regulations and export requirements, with emphasis on customs declaration accuracy.
Flexible format; can vary depending on the provider for businesses or delivery service providers.
Use in Process
Attached to shipments for inspection by customs authorities to enable quick clearance.
Sent to the buyer as part of the sales and payment process.
Associated Costs
Helps determine import tax, duties and taxes, and compliance-related fees.
Relates to the product price and any commercial agreements between the buyer and seller.
Examples of Use
Exporting goods where customs need to verify the customs clearance requirements.
Local or international trade where proof of sale is needed for payment.
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As mentioned, customs invoices and, in some cases, commercial invoices, play a vital role in international shipping. Before handing a package over to a courier or shipping company, you must print and attach both the customs invoice and the shipping label to the parcel.
The ideal approach is to print three copies of the invoice, as customs officers might remove one copy during transit before the package is delivered further. It is also advisable to insert another copy of it in the package in case the external invoice becomes detached or damaged during shipping.
The customs invoice should be affixed to the outside of the parcel. This will assist customs authorities in inspecting the contents, verifying customs declaration information, and determining the value of the goods.
The most appropriate method of displaying the customs invoice on a package is to use a document pouch designed for shipping. A clear plastic wallet or envelope is also a good option. However, you must ensure that the paper does not cover any barcodes on the shipping label, as tape is used.
Conclusion
In this guide, you have developed a clear understanding of what is a customs invoice and its purpose. However, depending on the goods you are shipping and the chosen destination, additional fields may need to be included in your customs invoice or commercial invoice to meet customs clearance requirements.
For further guidance, you can consult taxation and commercial experts online, who can provide ready-made templates, ensure compliance with import regulations and trade regulations, and make your shipments smoother with the help of delivery service providers, customs brokerage firms, and provider for businesses solutions.
FAQs
What is a Customs Invoice?
A customs invoice is an official export document that records the details of goods shipped internationally and helps customs authorities calculate duties, taxes, and verify compliance.
Is a Customs Invoice mandatory for every export?
Yes. It is required for all international shipments to comply with customs clearance procedures in the destination country.
What is the difference between a Customs Invoice and a Commercial Invoice?
A customs invoice is meant for customs authorities to assess taxes and duties, while a commercial invoice is a sales document issued to buyers to record payment and delivery terms.
What are the compulsory details in a Customs Invoice?
It must include exporter and consignee details, description and quantity of goods, HS codes, country of origin, freight and insurance charges, and a signed declaration of accuracy.
Who prepares the Customs Invoice?
The exporter or seller prepares it, often with assistance from shipping agencies, customs brokers, or logistics providers to ensure compliance with regulations.
Where should the Customs Invoice be placed on the package?
It should be securely affixed on the outside of the parcel in a transparent pouch, ensuring barcodes or shipping labels are not covered.
Sandipan Mitra is the CEO and co-founder of Pice. He boasts eight years of experience in the B2B and fintech sector. Sandipan's journey includes significant roles at multiple Indian Unicorns Including Product at PayU, and as founding member / VP, Product at Open Financial Technologies.
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