Commercial Invoice vs Tax Invoice (GST): What Indian Exporters Need to Know
This is one of the most confusing things for a new Indian exporter. You've heard you must raise a "GST tax invoice," but your foreign buyer and the customs paperwork ask for a "commercial invoice." Are they the same document? Do you need both? What about GST — do you charge it on an export? This guide clears it up in plain terms, specific to exporting from India.
The Short Answer
A commercial invoice is the international trade document your buyer, customs, and bank use for the export shipment. A GST tax invoice is the invoice required under Indian GST law for the supply. For an export, these are usually combined into one document — a single invoice that carries both the international shipping details and the GST particulars India requires. So in most cases you're not making two separate invoices; you're making one invoice that does both jobs.
What Is a Tax Invoice (Under GST)?
A tax invoice is the document a registered business must issue under India's GST law whenever it makes a taxable supply of goods or services. It has to carry specific particulars — your GSTIN, invoice number and date, the recipient's details, description and HSN code of the goods, quantity, value, and the tax charged. It's primarily a domestic compliance document: it's what GST is built around, and what you report in your GST returns.
What Is a Commercial Invoice?
A commercial invoice is the standard international trade document for a sale that crosses a border. Customs in both countries use it to assess the goods and duty, your buyer's bank uses it to release payment, and it travels with the shipment as the record of what was sold and for how much. If you want the full breakdown of what goes into one, see our guide on how to make a commercial invoice for export from India.
How They Relate on an Export
Here's the key point that removes the confusion: for an export from India, the invoice you raise is expected to be a tax invoice under GST and serve as the commercial invoice for the shipment. A properly made export invoice simply includes everything both need — the GST particulars (GSTIN, HSN, invoice number/date) plus the international shipment particulars (buyer and consignee, ports, country of origin and destination, Incoterms, currency). One document, both purposes.
The export invoice also carries an extra declaration that a purely domestic tax invoice doesn't: a statement of whether the export is made with payment of IGST or without payment of IGST under a LUT/Bond (explained below).
Commercial Invoice vs Tax Invoice: Side by Side
| Commercial Invoice | Tax Invoice (GST) | |
|---|---|---|
| Governed by | International trade practice | Indian GST law |
| Main purpose | Customs clearance, buyer payment, shipping record | GST compliance and return reporting |
| Primary audience | Foreign buyer, customs, banks | Indian tax authorities |
| Key fields it must carry | Buyer/consignee, ports, origin/destination, Incoterms, currency, value | GSTIN, invoice no. & date, HSN code, taxable value, tax |
| On an export | Usually the SAME single document — one invoice that carries both sets of details | |
Do You Charge GST on an Export?
Exports are treated as zero-rated supplies under GST. That doesn't mean GST is simply ignored — it means you have two legitimate routes, and you pick one:
- Export under LUT (without payment of IGST). You file a Letter of Undertaking (LUT) with the GST department, and then you export without charging IGST on the invoice. This is the route most regular exporters use because it avoids blocking working capital. Your invoice states it is an export "under LUT without payment of IGST."
- Export with payment of IGST (and claim refund). You charge IGST on the invoice, pay it, and then claim it back as a refund. Some exporters prefer this depending on their situation.
Practical takeaway: most small exporters register a LUT once (it's renewed each financial year) and then invoice without IGST. Which route suits you can depend on your cash flow and input credits — this is worth a quick check with your CA, as the right choice varies by business.
Common Points of Confusion
- "Do I make two invoices?" — Generally no. One well-made export invoice serves as both your GST tax invoice and the commercial invoice for the shipment.
- "Do I put GST on the export invoice?" — Only if you're exporting with payment of IGST. Under LUT, you don't charge IGST — but you still state the LUT declaration.
- "HSN vs HS code" — India's HSN codes are built on the international HS system, so the same code generally works on both the GST and the customs side.
- Currency — an export invoice is typically in the foreign currency agreed with the buyer, while your GST reporting converts to INR at the applicable rate.
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Generate Free →Frequently Asked Questions
For an export, they're usually the same single document — one invoice that carries both the international shipping details and the GST particulars India requires. They're different concepts, but on an export they're normally combined.
Exports are zero-rated. You either export under a LUT without paying IGST, or export with payment of IGST and claim a refund. Most regular exporters use the LUT route.
A Letter of Undertaking filed with the GST department that lets you export without paying IGST on each invoice. It's filed once per financial year.
Customs works from the commercial invoice, but on an export from India that document is also your GST tax invoice, so a single properly made export invoice covers it.