Definition
A commercial invoice is the primary document used by customs to determine the value of imported goods for duty assessment. It is a legal record of the sale between exporter and importer.
Why it matters for traders
The commercial invoice is the basis for customs valuation. Errors in the invoice — wrong values, missing HS codes, or inconsistent descriptions — can cause customs holds, duty reassessments, and payment delays.
Required information
A compliant commercial invoice must include:
- Seller and buyer details (names, addresses, tax IDs)
- Invoice number and date
- Description of goods with HS codes
- Quantity, unit price, and total value
- Currency of transaction
- Incoterm used
- Country of origin
- Freight and insurance charges (if not included in the price)
- Signature or authorization
Common invoice errors
- Values that do not match the purchase order or LC
- Missing or incorrect HS codes
- Inconsistent product descriptions across documents
- Currency mismatch with the LC or contract
- Omitting freight/insurance when the Incoterm requires them to be declared separately
Operational example
A Chinese exporter ships electronics to a buyer in Saudi Arabia. The commercial invoice lists each item with its HS code, unit price in USD, total value, and the Incoterm (CIF Jeddah). Saudi customs uses this invoice to assess import duty. If the invoice value seems artificially low, customs may request additional proof of value or apply a reference price.