ERPNext GST Setup with the India Compliance App: E-Invoice, E-Way Bill, GSTR-1

ERPNext GST setup is done through the free, open-source India Compliance app. Install it, enter your GSTIN and GST accounts, add HSN codes and tax templates, connect your GSP credentials, and ERPNext can then generate e-invoices and e-way bills and prepare GSTR-1 from your own transactions. This guide walks through each step, the settings that trip people up, and how to check your setup before filing.

Who this is for: accountants, finance managers and owners of Indian SMEs (trading, retail, distribution, manufacturing and services), especially in Kerala, who already use ERPNext or are about to go live.

What the India Compliance app does in ERPNext

ERPNext's core is country-neutral. The India Compliance app adds the Indian layer: GST-aware transactions, GSTIN and HSN validation, e-invoice and e-way bill integration with the government portals, GST returns, TDS/TCS and India-specific reports.

Feature	What it does	When you need it
GST tax templates and accounts	CGST, SGST, IGST and cess calculated on every invoice	Every GST-registered business
GSTIN validation	Checks party GSTINs against the GST portal	Every business with B2B customers or suppliers
HSN/SAC on items	Mandatory codes for invoices and returns	Every business
e-Invoice (IRN + QR)	Registers B2B invoices on the IRP and prints the signed QR	Aggregate turnover above ₹5 crore
e-Way bill	Generates, updates and extends e-way bills	Goods movement above ₹50,000 consignment value
GSTR-1 and GSTR-3B	Prepares and validates returns from your transactions	Every regular taxpayer
Purchase reconciliation and IMS	Matches your purchases with GSTR-2A/2B and supplier invoices	Anyone claiming input tax credit

Step 1: Install India Compliance and connect your account

On Frappe Cloud, add the India Compliance app to your site from the dashboard. On a self-hosted server, your partner installs it with bench, using the app branch that matches your ERPNext version.

Next, sign up for an India Compliance account from inside ERPNext. This enables the API features. On Frappe Cloud the API usage is included; when self-hosted, you buy credits (₹0.50 each for the first 10,000, then lower rates, plus GST).

Step 2: Company, GSTIN and GST accounts

Getting the company record right avoids most later errors:

• Enter the company GSTIN and make sure the company address has the correct GST state. This decides whether ERPNext applies CGST + SGST or IGST.
• If you have several GSTINs (for example, branches in Kerala and Karnataka), create a separate address for each registration and use the right one on every invoice.
• In GST Settings, confirm the GST accounts for output and input CGST, SGST, IGST and cess, plus reverse charge accounts if you need them.

Step 3: Items, HSN codes and Item Tax Templates

Every item needs an HSN code (or SAC for services). India Compliance validates it, and GSTR-1 uses it for the HSN summary.

Then map each item or item group to an Item Tax Template with the right rate. After the 56th GST Council meeting, most goods and services moved to 5% or 18% from 22 September 2025, with a 40% rate for selected goods. If your templates were created before that date, review them now.

Tip: set the tax template on the Item Group where you can, so new items inherit the right rate automatically.

Step 4: Customers and suppliers

For each party, enter the GSTIN and let India Compliance fetch and validate the details. Check the GST category (registered regular, composition, unregistered, SEZ, overseas and so on), because it drives tax treatment and return sections.

Clean party masters matter more than any setting. Duplicate customers with slightly different GSTINs are the most common cause of GSTR-1 mismatches we see after a Tally migration. Our guide to ERPNext data migration challenges covers how to clean them before import.

Step 5: ERPNext e-invoice setup

E-invoicing has been mandatory since 1 August 2023 for businesses whose aggregate turnover exceeds ₹5 crore. To set it up:

1. Create an API user on the e-invoice portal through your GSP and add the same username and password in GST Settings → Credentials.
2. Enable e-Invoicing and set the applicable-from date for each company.
3. Choose whether ERPNext should generate the e-invoice automatically when a Sales Invoice is submitted, and whether to generate the e-way bill with it.
4. Test with a real B2B invoice, check that the IRN, acknowledgement number and signed QR code print on your invoice format.

Watch the 30-day rule. Since 1 April 2025, businesses with turnover of ₹10 crore or more cannot report e-invoices older than 30 days on the IRP, according to the GSTN advisory on e-invoice reporting time limits. Auto-generation on submit is the simplest way to stay inside that window.

Step 6: ERPNext e-way bill generation

Under CGST Rule 138, an e-way bill is needed when the consignment value exceeds ₹50,000. India Compliance can create e-way bills from Sales Invoices, Purchase Invoices, Delivery Notes, Purchase Receipts, Stock Entries and Subcontracting Receipts.

• Turn on e-way bill features in GST Settings, and optionally auto-generate on submission.
• Fill transporter and vehicle details on the document, or update Part B later from the e-way bill menu.
• Use bulk generation (enqueue or JSON upload) for dispatch-heavy days.
• Extend validity from ERPNext when a vehicle is delayed.

See the India Compliance e-way bill documentation for each option.

Step 7: GSTR-1, GSTR-3B and ITC reconciliation

GSTR-1 from ERPNext: India Compliance builds GSTR-1 from your submitted invoices and credit notes, validates it, and flags issues such as missing HSN codes or wrong tax type for inter-state sales. Review the summary, fix the source documents, then upload through the app or download the file for the GST portal, depending on your setup.

GSTR-2B reconciliation in ERPNext: the Purchase Reconciliation Tool downloads GSTR-2A/2B and matches it to your Purchase Invoices, so you see missing, mismatched and unclaimed invoices. The Invoice Management System (IMS) view lets you accept, reject or keep supplier invoices pending; accepted invoices flow into GSTR-2B and your eligible ITC.

Common ERPNext GST setup mistakes

• Wrong state on the company or customer address, which applies IGST instead of CGST + SGST (or the reverse).
• Missing or outdated HSN codes and tax templates, especially after the September 2025 rate changes.
• Testing e-invoicing only after go-live. Test with real data in the week before.
• Editing submitted invoices instead of using credit notes, which breaks IRN and return data.
• Reconciling ITC only at year-end. Monthly reconciliation catches supplier errors while they can still be fixed.

For a broader view of how ERPNext calculates tax, read how taxes are calculated in ERPNext.

How Nexeves sets up GST in ERPNext

Our consultants in Kozhikode set up India Compliance as part of every Indian ERPNext rollout:

1. Review your GST registrations, turnover band, product HSN codes and current Tally or Excel data.
2. Configure and test tax templates, GST Settings, e-invoice and e-way bill flows with your real invoices.
3. Train your accounts team in Malayalam or English on monthly GSTR-1, reconciliation and IMS.

GST setup is part of our ERPNext accounting module work and our wider ERPNext implementation services. For budget planning, see the ERPNext implementation cost guide. If you're still choosing who should do the work, use our 10 questions to ask an ERPNext partner in Kerala.

Frequently asked questions

Does ERPNext support GST?

Yes. GST in ERPNext is handled by the free, open-source India Compliance app. It adds GSTIN and HSN validation, GST tax templates, e-invoice and e-way bill generation, GSTR-1 and GSTR-3B reports, and purchase reconciliation against GSTR-2A and 2B. You install it alongside ERPNext and configure it in GST Settings.

Is the India Compliance app free?

The app itself is free and open source. Features that call government APIs, such as e-invoice, e-way bill and GSTIN validation, use an India Compliance account. On Frappe Cloud the API features are included; on a self-hosted server you buy API credits, starting at ₹0.50 per credit plus GST.

Who needs to generate e-invoices in ERPNext?

Businesses whose aggregate annual turnover exceeds ₹5 crore in any financial year since 2017-18 must issue e-invoices for B2B supplies, exports and certain other documents. Since 1 April 2025, businesses with turnover of ₹10 crore or more must report e-invoices on the IRP within 30 days of the document date.

How do I generate an e-way bill from ERPNext?

Enable e-way bill features in GST Settings and add your GSP credentials. When you submit a Sales Invoice or Delivery Note above the threshold, India Compliance can generate the e-way bill automatically. You can also create it manually, update vehicle details, extend validity or produce JSON for bulk upload.

Can I file GSTR-1 directly from ERPNext?

India Compliance prepares GSTR-1 from your ERPNext transactions, validates the data and flags errors such as missing HSN codes or wrong tax types. Depending on your app version and API access, you can upload it through the app or download the file for the GST portal. Always review the summary before filing.

What GST rates should I set in ERPNext after the 2025 changes?

After the 56th GST Council meeting, most goods and services moved to a 5% or 18% rate from 22 September 2025, with a 40% rate for selected goods. Review every Item Tax Template and item HSN mapping against the current notified rate for your products before you invoice.