Why the Proforma Invoice Is the Most Important Document
The Proforma Invoice (PI) is the starting document for an import transaction. Your Nigerian bank uses it to open the Form M. The commercial invoice (issued after shipment) must closely match it. The customs PAAR is based on the declared values in it. The CCVO references it. If the PI has errors — wrong HS codes, incorrect prices, wrong supplier address — every downstream document will need correction, causing delays at every stage.
Before accepting a Proforma Invoice from any Indian supplier, check every field methodically. A 15-minute review at this stage prevents weeks of problems downstream.
The Supplier Details Section
Exporter name and address — Must exactly match the name on the supplier's IEC certificate and GST registration. Any discrepancy (different abbreviation, different address) can cause CCVO issues or bank query during Form M processing.
GSTIN (Goods and Services Tax Identification Number) — A 15-digit alphanumeric code assigned to every GST-registered Indian business. Format: two-digit state code + 10-digit PAN + entity code + check digit. Verify the GSTIN is real using India's GST portal (gstin search is public). A supplier who cannot provide a valid GSTIN is not legally registered for GST and is not operating a legitimate export business.
IEC (Importer-Exporter Code) — A 10-digit code issued by the DGFT. Every legal Indian exporter must have one. Request it and verify it on the DGFT portal. The IEC and GSTIN should match the same company name.
Bank details — The PI should show the supplier's company bank account (account name, account number, bank name, SWIFT code, IFSC code for domestic transfers). The account name must match the company name on the PI. A discrepancy here suggests you may be asked to pay a different entity than the one invoicing you — a red flag.
The Goods and Pricing Section
Description of goods — Must be specific enough to identify the parts clearly: "Bajaj Boxer 150cc aftermarket-compatible piston kit (piston, rings, pin, clips)" is a good description. "Engine parts" is not. Vague descriptions attract customs query and potential misclassification.
HS Code — The Harmonized System code assigned to each product. This determines the import duty rate your Nigerian clearing agent will use for the PAAR. If the HS code is wrong, your duty assessment will be wrong. Check the codes against the HS codes reference page or confirm with your clearing agent before accepting the PI.
Quantity and unit of measure — Clear quantity (e.g. "200 sets") and unit (sets, pieces, kits). Ambiguity here translates directly to packing list discrepancies and customs examination problems.
Unit price and total price — Prices must be in USD (or agreed currency). The total must equal quantity × unit price. Check the arithmetic — errors in totals are surprisingly common. The price level should be realistic for the market — prices significantly below market for any component are a warning sign.
Incoterms — The trade terms: FOB (supplier responsible until goods are loaded at Indian port), CIF (supplier responsible until goods arrive at your port). This determines who pays freight and insurance and at what point title passes. Confirm with your supplier that the Incoterms match what you agreed verbally.
The Reference and Compliance Section
Country of origin — Must state "India" or "Made in India." This is required for the CCVO application and for customs origin declarations. A PI that shows goods of unknown or unspecified origin cannot be used to obtain an Indian origin certificate.
Port of loading — Which Indian port the goods will ship from. Most CrestMAX shipments load at Mumbai (JNPT) or Chennai. The port of loading affects transit time and in some cases freight rates. Confirm it matches what was discussed.
Validity — Proforma Invoices have a stated validity period (typically 7–30 days). This is because prices of goods and freight can change. Ensure you can complete Form M opening and other pre-shipment steps within the PI validity period, or ask for an extension before the PI expires.
Payment terms — Should state the agreed payment method: e.g. "30% advance TT, 70% against B/L copy" or "100% advance by TT." This must match your verbal agreement and your bank's Form M application. Discrepancies between PI payment terms and Form M payment terms cause bank queries.
Before You Sign Off — A Checklist
- —Supplier name and address matches IEC and GST registration
- —GSTIN is valid (verify on GST portal)
- —IEC is valid (verify on DGFT portal)
- —Bank account name matches company name on PI
- —Goods descriptions are specific, not vague
- —HS codes are correct for the declared goods
- —Quantities and unit of measure are unambiguous
- —Unit prices and totals are arithmetically correct
- —Prices are at realistic market levels
- —Incoterms match what was agreed
- —Country of origin states India
- —Port of loading is confirmed
- —PI is within validity period for your Form M timeline
- —Payment terms match your bank's Form M application
A PI that passes all of these checks is a PI you can work with. One that fails on any of the first five points should be corrected before you proceed.