Commercial Invoice (UCP 600 Article 18) | Trade Samaritan

Commercial Invoice (UCP 600 Article 18)

All the banks and financial institutions handling LC transactions know that they are required to deal with documents and not concerned with the underlying goods/services/performance, but when you minutely study the rules around the value and the description to be provided/not provided on the invoice with examples you will notice that with these rules a sincere attempt has been made to maximize the authenticity and genuineness of the goods/services/performance.

Invoice on the face of it looks like one of the simplest documents to be scrutinized, however the rules around the description and the value of the invoice can get complicated if not read and understood in detail. In simple terms, an invoice is an itemized bill provided by the seller to the buyer in order to claim the payment. An invoice typically contains the unit price, total charge and the terms. However UCP 600 and ISBP 745 have stipulated certain conditions for an invoice to be accepted as a clean document for processing under the said Letter of Credit. The stipulated rules are enlisted below, any condition specifically mentioned in the LC terms will usually supersede these generic requirements.



  • Need not be signed or dated
  • When a credit requires an Invoice; Commercial Invoice, Tax invoice, Final invoice, consular invoice, custom invoice – all are acceptable
  • When a credit requires presentation of a commercial invoice, a document titled “invoice” will be acceptable.
  • Provisional Invoice or Proforma Invoice is not acceptable
  • Invoice stating ‘issued for tax purposes’ is acceptable
  • Address of beneficiary and applicant need not match with the address stated on the documentary, but the country should match
  • Address and contact details must match with the LC if stated in ‘Consignee’ or ‘Notify’ party
  • If the trade term is stated as part of goods description in the LC, it should be indicated on the invoice, regardless of whether stated on the LC or not, the source should be indicated on the LC.

CIF Mumbai Incoterms 2010 is the correct way of stating inco term on the invoice.


  • Must be issued by the beneficiary and drawn on applicant (except under transfer LC)
  • In case of Transfer LC, can be drawn by the second beneficiary
  • If the beneficiary name has changed, invoice issued with a new name quoting the old name indicated in the LC as ‘formerly known as ‘ or the like is acceptable.

Beneficiary name on the invoice appearing as ‘Sweets INC ( formerly known as Delicious INC)’ is acceptable where LC states beneficiary name as ‘Delicious INC’.

  • Invoice can very well be issued by a third party (party other than the beneficiary) provided LC states that ‘third party documents are acceptable’

Description of Goods/Services/Performance

  • Goods description must correspond with the LC
  • Description of goods may be stated in a number of areas on invoice which when collated together represent a description of goods corresponding to that in the LC.

 ‘Hush Puppies Women’s shoes Slip-On Moccasins’ as mentioned on the credit is acceptable on invoice even if it is stated in 3 different sections of the invoice as ‘Hush Puppies Shoes’ ‘For Women’ ‘Slip-On Moccasins’

  • Additional description of  the goods is acceptable provided that it does not provide an altogether different nature, classification or category of goods, services or performance

 ‘Hush Puppies Women’s shoes Slip-On Moccasins’ as mentioned on the credit will be considered as a discrepancy if it is stated as ‘Hush Puppies Shoes Women plane buck shoes’ on the invoice.

  • Quantity and weight should not conflict with the LC
  • Quantity can vary +/- 5% but should not change the amount
  • Description stated on the invoice should match with the transport document
  • Must not indicate additional merchandise even if stated to be free of cost or sample

‘Hush Puppies sunny sandals (Free Samples) Quantity 50 Nos.’ will count as a discrepancy if included on the invoice meant for  ‘Hush Puppies Women’s shoes Slip-On Moccasins’

Value of the invoice

  • Invoice should always indicate, value of goods/services, currency same as the LC, unit price and discount, if any

‘Hush Puppies Mall Walker Oxford’ Quantity = 50 Nos; Unit Price : $116.00; Total Discount : $500.00 is acceptable

  • Can show a deduction towards  advance or discount not indicated on the credit
  • If partial shipment is prohibited, an invoice comprising of 95% of the LC value can be considered as full and final (5% less)
  • Can be of an amount in excess of the LC value but should not be honored or negotiated in excess of the LC
  • Must not show over shipment


  • cvrk

    Good article… continue your service..

  • Basem Mohammad Abdallat

    If description of goods mentioned on commercial invoice not as per L/C but in same meaning , for example description of goods on credit is “”steel for structure”” and on commercial invoice “”structural steel”” is that acceptable or not? And why is it acceptable or not?