A customer may ask for a quote, a proforma and a final invoice at different points in the same project. Give each document a clear purpose so an early estimate is not confused with the final billing record.
What is the difference?
| Comparison | Quotation | Proforma Invoice | Tax Invoice |
|---|---|---|---|
| Purpose | Propose scope, prices and terms. | Present preliminary invoice-style details. | Document a taxable supply. |
| When to Issue | Before the customer agrees to the proposed work. | Before the final invoice, when preliminary billing details are needed. | Within the applicable GST invoicing time limits for the supply. |
| GST Validity | Not a GST tax invoice. | Not a GST tax invoice, even if estimated GST is shown. | A GST invoicing document when issued in compliance with applicable requirements. |
| Accounting Impact | Does not by itself record a sale or receipt. | Does not by itself record a completed sale or receipt; track any actual advance separately. | Supports recording the billed supply and tax; payment and revenue recognition require separate checks. |
| Revisions | Update the proposal and confirm accepted terms. | Number each revision, preserve earlier PDFs and confirm the accepted version. | Use the applicable correction process, including credit or debit notes where required. |
Do not use this comparison to decide a document's contractual effect: that depends on its wording, acceptance and circumstances. A proforma from our free tool is not a GST tax invoice or payment receipt. GST invoice requirements are covered in Section 31 and the applicable rules, including Rule 46.
Example: a design project changes scope
- Quote: a studio proposes a website design milestone for ₹25,000, with taxes to be confirmed.
- Proforma V1: it prepares a preliminary document with the agreed description and estimated amounts.
- Proforma V2: the customer requests an additional page. The studio updates the scope and price, clearly identifies V2 and keeps V1.
- Final invoice: the studio uses the agreed details and the applicable invoicing requirements. The final invoice reference is separate from the proforma reference.
This is a workflow illustration, not a rule about when GST invoicing or tax liability arises. Advances and particular supplies can require different treatment; confirm those with your CA.
How to manage proforma revisions
- Use a stable proforma reference and a visible revision number/date.
- Save each shared PDF rather than replacing the old file.
- Describe what changed: scope, quantity, price or terms.
- Ask the customer to identify the revision they accept.
- Keep that acceptance with the document and link your final invoice to the agreed details.
Prepare a document now
Start with the free quotation generator to propose scope, exclusions, prices and an acceptance process.
Use the free proforma invoice generator to create and print a preliminary document. You keep the PDFs yourself in this free tool. For saved revision history, use the Lekhiva application.
References and next steps
Consult the CGST Act, Section 31 and CBIC's GST rules, including Rule 46 for the statutory invoice framework. For an example of proforma use in software, see Zoho's proforma documentation.
Next: GST invoice fields to check or records to prepare for your CA. This guide has not been independently reviewed by a CA.
Keep the next step clear
Use our proforma revision guide to identify the version your customer accepted, and the proforma generator to prepare a labelled PDF. After issuing an invoice, use the payment tracker to review receipts and balances.
Frequently asked questions
What is the difference between quotation and proforma invoice?
A quotation proposes scope, prices and terms for a customer to consider. A proforma invoice presents preliminary invoice-style details before the final invoice, often after the proposed scope is clearer. Neither document is a GST tax invoice.
Is proforma invoice and quotation the same?
No. Both can communicate proposed prices, but a quotation is an offer of scope and terms, while a proforma is a preliminary invoice-style document. Their contractual effect depends on the wording and acceptance, not just the document title.
Can proforma invoice be used as tax invoice?
No. A preliminary proforma does not replace the tax invoice required for a taxable supply. Issue the applicable tax invoice with the required particulars and within the applicable time limits; showing estimated GST on a proforma does not make it a tax invoice.