Quotation vs Proforma Invoice vs Tax Invoice: What's the Difference?
A quotation is an offer sent before the deal. A proforma invoice confirms the order and is used to collect an advance – it is not a tax document and no GST liability arises from it. A tax invoice is issued when the goods or services are supplied; it carries GST and lets a registered buyer claim input tax credit. A credit note reduces an invoice already issued.
The documents at a glance
| Document | When | GST charged? | Buyer can claim ITC? |
|---|---|---|---|
| Quotation | Before the order | Shown for information | No |
| Proforma invoice | After the order, before supply | Shown for information | No |
| Tax invoice | On supply | Yes | Yes |
| Bill of supply | Exempt goods or composition dealers | No | No |
| Credit note | After a return, discount or overcharge | Reduces GST | Reduces ITC |
Quotation
The offer: scope, price, taxes, validity and terms. Read how to write a quotation that wins.
Proforma invoice
Looks like an invoice, but marked Proforma. Use it to collect an advance, for a customer's purchase approval, or for import paperwork. Give it its own number series so it never clashes with your tax invoices.
Tax invoice
The legal document for a taxable supply. It must follow Rule 46 and is reported in GSTR-1.
Credit note
Issued to reduce a tax invoice – goods returned, a discount after sale or a price correction. See credit notes under GST.
One flow in Invoice24
Quotation → proforma → tax invoice → credit note, each with its own number series. Converting copies the client, items and taxes forward, and the dashboard shows your quote → accepted → invoiced → paid funnel.
Frequently asked questions
Do I pay GST when I issue a proforma invoice?
+
No. GST becomes payable when the tax invoice is issued or the supply is made (or on an advance for services). The proforma itself creates no liability.
Can a proforma invoice be used to claim ITC?
+
No. Only a tax invoice (or debit note) supports an input tax credit claim.
Should proforma invoices have a separate number series?
+
Yes. Keep a separate series such as PI/2026-27/001 so your tax invoice numbers stay consecutive.
GST invoices, quotations with client approval and branded letterheads – private, offline-ready and free.