The commercial invoice is the final invoice at shipment, replacing the proforma invoice with the actual shipped quantities and values. It is the primary document destination customs use to assess the cargo’s value, classify it for duty, and compute the duty owed. Every shipment requires one and customs scrutinise it more than any other document in the set.
What the commercial invoice must show
The commercial invoice carries everything the PI carried plus the as-shipped reality:
- Seller and buyer (full legal names, addresses, tax IDs where applicable)
- Invoice number and date (must align with the date of shipment)
- Reference to the proforma invoice and purchase order
- Detailed product description including HS code per line
- Quantity actually shipped per line (may differ from PI within agreed tolerance)
- Unit price and extended price per line
- Currency (USD is standard for Chinese chemical exports; some EU buyers contract in EUR)
- Incoterm and named port (must match BOL)
- Country of origin (must match certificate of origin)
- Total invoice value
- Payment terms and bank details
- Seller signature and stamp
What customs cares about
Three things on the commercial invoice drive duty calculation:
- HS code per line. Determines the standard MFN duty rate, the eligibility for FTA preference, and the applicability of Section 301 or anti-dumping measures.
- Declared value per line. The starting point for customs valuation. Customs may accept the declared value (transaction value method) or, if the value looks low, may apply alternative valuation methods including reference to identical or similar goods.
- Country of origin. Determines tariff preference eligibility and specific-country tariff exposure (Section 301 applies to Chinese-origin goods only).
If any of the three is wrong, the duty calculation is wrong, and the importer either over-pays at entry (rarely caught) or under-pays and faces back-duty plus penalties at audit (caught more often than buyers expect).
The under-invoicing trap
The temptation: factory and buyer agree to write a lower value on the commercial invoice to reduce destination duty exposure. The invoice shows USD 30,000 instead of the real USD 50,000. Buyer pays duty on USD 30,000, saving thousands.
This is customs fraud. Three ways customs catch it:
- Customs valuation database checks. Customs maintain reference databases of average values for HS codes from China origin. A USD 30,000 declared value on a substance that customs values at USD 50,000 per their database flags for inspection.
- Bank wire reconciliation. Customs can request bank records showing the actual amount wired to the factory. If the wire transfers add up to USD 50,000 against an invoice of USD 30,000, the discrepancy is on paper.
- Whistleblower disclosures. Disgruntled factory staff, ex-employees, or competitor tips routinely surface under-invoicing schemes to destination customs.
Penalties for under-invoicing in the US (Section 1592 false statement) can reach four times the loss of revenue. In Australia they can include cancellation of the importer’s customs licence. The savings on a single shipment are not worth the audit exposure.
Differences from the proforma invoice
| Field | Proforma Invoice | Commercial Invoice |
|---|---|---|
| When issued | Before production | At shipment |
| Quantity | Agreed quantity | As-shipped quantity (within PI tolerance) |
| Date | PI date (pre-deposit) | Shipment date |
| Reference | None | References PI number |
| Customs use | Not used at entry | Primary entry document |
| Bank details | Used for deposit T/T | Used for balance T/T or L/C |
Practical sourcing notes
We require the factory to send the draft commercial invoice to us before final signing. We cross-check the HS code per line against the destination tariff schedule, the country of origin against the certificate of origin, and the declared value against the contract price. If the factory has typed the wrong HS code (a common error when the factory copies from a previous shipment), we correct it before the invoice is finalised. The commercial invoice is the single most-scrutinised document in the customs package, getting it right is worth the review time.
Related terms
Proforma Invoice is the contract document issued pre-production. Packing List reconciles the physical quantities against the commercial invoice’s financial quantities. HS Code on each invoice line drives the duty calculation.