ERPNext GST India: GSTR-1, GSTR-3B, e-Invoice
and e-Way Bill — Everything in One Complete Guide

Why ERPNext GST compliance matters — and what covers it

Running a GST-registered business in India in 2026 means staying on top of six overlapping compliance requirements — GSTR-1 outward supply reporting, GSTR-3B tax payment, e-Invoice IRN generation for eligible businesses, e-Way Bill for goods movement, ITC-04 for subcontracting manufacturers, and TDS/TCS where applicable. Miss any one of these and you face late fees, blocked ITC or GST notices.

ERPNext handles all six through the India Compliance app — the official open-source GST compliance app for ERPNext, maintained by the Frappe ecosystem and updated on GitHub with every CBIC rule change — no vendor patch dependency.

This guide covers each compliance area in detail — what it is, what ERPNext does automatically, what you need to configure, and the current 2026 rules and due dates.

The India Compliance app — what it is and how it works

The India Compliance app is the official open-source GST compliance application for ERPNext. It is the official India-specific compliance app for ERPNext, pre-installed on Frappe Cloud and available for self-hosted deployments via bench. For self-hosted ERPNext deployments, it is installed using the bench command.

The app integrates ERPNext directly with three government portals:

• Invoice Registration Portal (IRP) — for e-Invoice IRN generation and cancellation
• e-Way Bill portal — for e-Way Bill generation, Part B update and cancellation
• GST portal (GSTN) — for GSTR-1 and GSTR-3B data export and reconciliation

Configuration happens across three documents in ERPNext: GST Settings (where GSTIN, API credentials, e-invoice threshold and e-Way Bill preferences are configured), Company master (where GSTIN is linked to the company) and E-Invoice Settings (where IRP API credentials are stored). Once configured, most compliance actions happen automatically at the point of transaction — no separate portal login required for daily operations.

GSTR-1 — Outward Supplies Return

GSTR-1 is the return you file to report all outward supplies (sales) made during the period. It covers Sales Invoices, Credit Notes, Debit Notes and exports. Your buyers can claim ITC only if your GSTR-1 is filed correctly and on time — making it one of the most important compliance actions for maintaining business relationships.

Who files GSTR-1 and when

How ERPNext prepares GSTR-1

In ERPNext, every submitted Sales Invoice, Credit Note and Debit Note contributes to the GSTR-1 report automatically. The India Compliance app categorises each transaction correctly:

• B2B invoices — Sales Invoices where the customer has a GSTIN. Appear in the B2B section with buyer GSTIN, invoice number, taxable value and tax breakdown by rate.
• B2CS (B2C small) — B2C invoices below ₹2.5 lakh per invoice. Grouped by state and GST rate — individual invoices not required.
• B2CL (B2C large) — B2C invoices above ₹2.5 lakh. Individual invoice details required.
• Exports — Export invoices with or without payment of IGST. Categorised as EXPWP or EXPWOP.
• Credit notes (CDNR) — Credit notes against B2B invoices. Linked to the original invoice number.
• HSN summary — Aggregate supply value and tax by HSN code — mandatory for businesses above specified turnover.

At month-end or quarter-end, go to GST Reports → GSTR-1 in ERPNext, select the period, review the data and export the JSON file. Upload the JSON directly to the GST portal. No manual re-entry. No reconciliation between billing software and accounting software — because they are the same system.

GSTR-3B — Tax Payment Return

GSTR-3B is the monthly or quarterly summary return where you declare your total tax liability and ITC claims, and pay the net tax due. Unlike GSTR-1 which is invoice-level data, GSTR-3B is a summary — total outward supplies by tax rate, total ITC available, net tax payable after ITC set-off.

GSTR-3B due dates 2026

How ERPNext computes GSTR-3B

ERPNext's GSTR-3B report aggregates all GST transactions for the period — outward supplies from Sales Invoices, inward supplies and ITC from Purchase Invoices and GST on reverse charge. The report presents the figures table-by-table matching the GSTR-3B format: Table 3.1 (outward supplies), Table 4 (ITC), Table 5 (exempt and nil-rated). The accounts team reviews the figures, reconciles if needed, and uses the numbers to file GSTR-3B on the GST portal.

GSTR-2B and GSTR-2A reconciliation in ERPNext

The India Compliance app supports both GSTR-2B and GSTR-2A reconciliation — matching the ITC available in your GSTR-2B (auto-drafted monthly statement) and GSTR-2A (real-time inward supply statement) downloaded from the GST portal against the purchase invoices recorded in ERPNext. Mismatches — where a supplier has not filed their GSTR-1, filed it with an incorrect invoice amount, or used a wrong GSTIN — are flagged clearly. This protects your ITC claims from being reversed during scrutiny and gives your accounts team an early warning before the GSTR-3B filing date.

e-Invoice (IRN) — Real-time Invoice Reporting to IRP

e-Invoicing under GST is the real-time reporting of B2B tax invoices to the government's Invoice Registration Portal (IRP) before they are issued to customers. The IRP validates the invoice data, generates a unique Invoice Reference Number (IRN) and returns a signed QR code. The QR code must appear on every copy of the invoice given to the buyer.

e-Invoice applicability — current 2026 thresholds

The 30-day IRN reporting rule — applies from ₹10 crore AATO

From 1 April 2025, businesses with AATO of ₹10 crore or more must report invoices to the IRP within 30 days of the invoice date. Miss this deadline and the IRP will refuse the IRN request — the invoice cannot be e-invoiced after 30 days. The 30-day clock starts from the date printed on the invoice, not the date you attempt to upload it.

For businesses with AATO between ₹5 crore and ₹10 crore, the 30-day rule does not apply as of August 2026 — but reporting promptly is advisable as the government has progressively lowered thresholds.

How ERPNext generates e-Invoice IRN

e-Invoice cancellation

If an invoice is cancelled, the IRN must be cancelled at the IRP within 24 hours of IRN generation. After 24 hours, IRN cancellation is not possible — the invoice must be handled via a credit note instead. ERPNext supports IRN cancellation directly from the Sales Invoice screen within this window. After cancellation, the invoice can be amended and a new IRN generated for the amended invoice.

Worked example — e-Invoice GST amounts

e-Way Bill — Movement of Goods

An e-Way Bill is required for the movement of goods where the consignment value exceeds ₹50,000 — for both inter-state and intra-state movement. The e-Way Bill must be generated before goods leave the dispatch location. Transporting goods without a valid e-Way Bill where one is required attracts penalty and potential seizure of goods.

When e-Way Bill is required

• Consignment value above ₹50,000 — mandatory for both inter-state and (in most states) intra-state movement
• All modes of transport — road, rail, air, ship
• Both supply and non-supply movement — goods sent to job workers, goods returned from customers, goods sent for repair or exhibition

Certain categories are exempt — goods specifically listed in Annexure to Rule 138 of the CGST Rules, intra-state movement in states that have notified exemptions for specific goods, and movement by non-motorised transport.

How ERPNext generates e-Way Bill

In ERPNext, e-Way Bill can be generated from Sales Invoice or Delivery Note. From the submitted document, click e-Way Bill → Generate. ERPNext presents a form for transporter details — Transporter GSTIN, vehicle number, mode of transport, distance (km). On submission, the India Compliance app sends the data to the e-Way Bill portal API and returns the e-Way Bill number (EWB number) and validity period.

• Validity — 1 day per 200 km for road transport (minimum 1 day); 1 day per 200 km for all other modes
• Part B update — if the vehicle changes mid-journey, Part B can be updated from ERPNext
• Extension — e-Way Bill can be extended from ERPNext if goods have not reached the destination within validity
• Cancellation — e-Way Bill can be cancelled within 24 hours of generation if goods have not moved

ITC-04 — Quarterly GST Return for Subcontracting Manufacturers

ITC-04 is a quarterly GST return required under Section 143 of the CGST Act for any business that sends goods to job workers (subcontractors or third-party processors) on a delivery challan. It reports:

• Table 4 — Goods sent to job workers during the quarter (challan-wise)
• Table 5 — Goods received back from job workers during the quarter
• Table 6 — Goods sent directly from job worker's premises to another customer (if applicable)

How ERPNext auto-prepares ITC-04

In ERPNext, when material is sent to a job worker, a Subcontracting Order and a Subcontracting Receipt are raised. The delivery challan is generated from ERPNext when goods leave the factory. Every challan — the job worker name, material description, quantity sent, date dispatched and challan number — is recorded in ERPNext at the point of dispatch.

When goods return from the job worker, the Subcontracting Receipt closes the challan. At quarter-end, the ITC-04 report in ERPNext aggregates all open and closed challans for the quarter — Tables 4, 5 and 6 populated from transaction data. What used to take 3 days of manual challan hunting becomes a 45-minute export and review.

TDS and TCS — Tax Deducted and Collected at Source

TDS (Tax Deducted at Source) under the Income Tax Act applies when making certain payments to vendors — professional fees (Section 194J), contractor payments (Section 194C), commission (Section 194H) and others. TCS (Tax Collected at Source) applies to certain sellers — primarily e-commerce operators and sellers of specified goods.

How ERPNext handles TDS

In ERPNext, TDS is configured per supplier in the supplier master — the applicable TDS section, rate and threshold are set once. When a Purchase Invoice is posted for a TDS-applicable supplier above the threshold, ERPNext deducts TDS from the payable amount and posts the TDS to the TDS Payable account automatically. TDS certificates (Form 16A) are generated from ERPNext for quarterly distribution to vendors. The TDS data contributes to quarterly TDS return preparation.

Setting up India Compliance in ERPNext — the key steps

Setting up the India Compliance app correctly before go-live is critical. Mistakes in initial setup — wrong GSTIN, incorrect tax templates, missing HSN codes — propagate into every transaction and GST return. Here is the configuration sequence:

Frequently Asked Questions

Conclusion — GST compliance without a separate Tally

Managing GST compliance in India in 2026 means staying current with six overlapping requirements across monthly and quarterly cycles. The traditional approach — billing in one tool, accounting in Tally, manually reconciling GST data between them before every filing date — creates avoidable errors and consumes accounts team time that could be better spent.

ERPNext with the India Compliance app moves all six compliance requirements — GSTR-1, GSTR-3B, e-Invoice, e-Way Bill, ITC-04 and TDS — into a single system where every transaction drives the GST data automatically. No separate Tally entry. No end-of-month reconciliation between billing and accounting. GSTR-1 JSON ready to upload on the 11th because the invoices that generate it have been in ERPNext since they were raised.

The India Compliance app's open-source model means GST rule changes — new thresholds, new fields, new compliance requirements — are reflected in a GitHub update and deployed with one bench command. No vendor dependency, no patch waiting.