ERPNext for India: GST, E-Invoicing, E-Way Bills and Payroll

India is ERPNext's home market, and it shows. With the right setup, ERPNext handles GST accounting, e-invoicing and e-way bills as part of normal sales and purchase transactions, and Frappe HR covers Indian payroll. Here is how the pieces fit together.

India Compliance: the app that does the work

Indian regional features live in a separate open-source app called India Compliance, installed alongside ERPNext. It adds:

• GSTIN validation and GST categories on customers, suppliers and addresses
• Automatic CGST, SGST, IGST and cess calculation based on place of supply
• HSN and SAC codes on items, with validation
• E-invoicing — generating IRNs and signed QR codes on sales invoices
• E-way bills — generated from sales invoices or delivery notes
• GST reports such as GSTR-1 and GSTR-3B, plus purchase reconciliation against GSTR-2B
• TDS and TCS handling

If you are running an older ERPNext system where GST features came from ERPNext itself, an upgrade will involve moving to India Compliance — something to plan, not stumble into. See our ERPNext upgrade guide.

Setting up GST correctly

1. Company GSTINs and addresses. Every registration needs a company address with the correct GSTIN and state.
2. Customer and supplier GST details. GSTIN, GST category (registered, unregistered, SEZ, overseas and so on) and billing addresses. Clean this data during migration.
3. Item HSN/SAC codes and tax templates. Assign HSN or SAC codes and item tax templates for each rate. Wrong codes lead to wrong invoices and returns.
4. Tax templates. India Compliance sets up standard templates for intra-state and inter-state supply; review them against your transaction types.
5. Accounts. Input and output GST accounts per tax type, mapped in GST settings.

Test with real scenarios before go-live: intra-state sale, inter-state sale, export, SEZ supply, reverse charge purchase, credit note and an amendment.

E-invoicing and e-way bills

For businesses above the e-invoicing threshold, India Compliance can generate the IRN and QR code directly from a submitted sales invoice, and cancel within the allowed window. E-way bills can be generated from the same invoice or from a delivery note, with transporter and vehicle details.

Connection to the government portals goes through an API provider, configured with your credentials. Test in sandbox mode before switching to production.

GST returns and reconciliation

GSTR-1 data comes directly from sales invoices, so accurate master data and tax templates are what make filing straightforward. For input tax credit, the purchase reconciliation tool compares your purchase invoices with GSTR-2B data and highlights mismatches to chase with suppliers.

TDS

TDS categories and rates are configured as tax withholding categories and assigned to suppliers. ERPNext then deducts TDS on purchase invoices or payments once thresholds are crossed and posts it to the right accounts.

Indian payroll with Frappe HR

Frappe HR handles Indian payroll through salary components and structures:

• Basic, HRA, special allowances and other earnings
• Provident Fund, ESI and professional tax deductions
• Income tax with regime selection, tax slabs and employee exemption declarations
• Payroll entries, salary slips and bank payment files, posted to accounts by cost centre

Run at least two parallel payrolls against your current system before switching.

Migrating from Tally

Most Indian ERPNext projects start from Tally. Ledgers, GST details, stock items and godowns all map across with some thought. We cover the process in migrating from Tally to ERPNext.

Getting it right

GST configuration is the part of an Indian ERPNext implementation that must be right from day one, because every invoice depends on it. Our ERPNext accounting and ERPNext HR and payroll services include setup, testing with your accountant, and support through your first returns. For other platforms in India, see our Odoo India guide.