Both bills of lading and commercial invoice are used in international trade. They serve as an important document in international trade. The CBIC has mandated commercial invoices and bills of lading to be a part of import/export transactions. This article lists the differences between a commercial invoice and a bill of lading.
Particulars | Commercial invoice | Bill of lading |
---|---|---|
Meaning | It is a formal document issued by the seller to the buyer in an international sale transaction. It serves as proof of international sale. | A bill of lading is an official contract between the seller and the shipping company containing details of goods sold, quantity, and the recipient’s address. |
Requirement | A commercial invoice plays a vital role in determining the correct value of imported goods. It also helps to assess the number of duties and taxes. | Bill of lading is accepted as proof of shipment of goods. |
Contents | A commercial invoice must include: Name and address of the buyer Description of goods Quantity Due date of payment Freight charges and packing charges Insurance costs, etc. which are to be recovered from the buyer | A bill of lading should contain the information required by the carrier for schedule pick-up and delivery of goods to the buyer, which includes: Buyer name and address Product name and quantity Gross and net weight of the shipment Special handling information in case of hazardous goods |
Who issues? | The seller of goods issues a commercial invoice. | It is issued by the shipping company when they control the goods. |
Parties | It is a legal contract between the seller and the buyer of goods. | It acts as a binding contract between the shipper and the shipping company. |
Ownership of goods | It does not indicate the ownership of goods or carries the title to goods being sold. | It indicates the ownership of goods. |
Purpose | It is used to detail the financial transaction for the sale of goods. It should be prepared accurately as any misinformation may lead to underpayment of duties and taxes. | It serves more of a logistical purpose and emphasises the physical description of goods. It is beneficial in disputes with buyers, shipping companies or customs departments. |
Time limit | It must be prepared on or before the dispatch date of goods. | It is prepared when loading the goods onto the vessel for international transit. |
Bills of lading and commercial invoices are essential in international trade. Differences detailed: purpose, contents, issuing parties, ownership indication, and time limits.