Odoo ERP for India: GST, TDS/TCS & E-Way Bill Integration

Whether you are a manufacturer in Gujarat, an IT services company in Bangalore, an e-commerce business in Delhi NCR, or a multi-state distributor, this guide walks you through configuring Odoo ERP for the Indian market with full regulatory compliance.

Key Takeaways

• GST has four rate slabs (5%, 12%, 18%, 28%) with CGST+SGST for intrastate and IGST for interstate transactions
• E-invoicing is mandatory for businesses with aggregate turnover above INR 5 crore (as of 2026)
• E-Way Bill is required for goods movement exceeding INR 50,000 in value
• TDS under GST (Section 51) and TCS (Section 52) apply to specific transaction types
• Indian payroll involves PF (12%+12%), ESI (0.75%+3.25%), professional tax, bonus, and gratuity
• Odoo's Indian localization includes GSTN-integrated e-invoicing, HSN/SAC code management, and multi-state operations

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India's Business Landscape and ERP Requirements

Market Context

Why India Needs Specialized ERP

India's GST system is inherently complex because every interstate transaction requires different tax treatment than an intrastate one. With 36 GSTIN registrations possible (one per state), monthly/quarterly return filing, invoice-level matching, and aggressive digitization by GSTN (GST Network), businesses need an ERP that is deeply integrated with India's tax infrastructure. Odoo's Indian localization, actively maintained and updated with every GST Council notification, delivers this integration.

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GST Configuration in Odoo

GST Structure: CGST, SGST, and IGST

India's GST has three components that apply based on transaction geography:

Intrastate supply (within same state): CGST (Central) + SGST (State) — each at half the total rate. Example: 18% GST = 9% CGST + 9% SGST.

Interstate supply (between states or to a UT): IGST (Integrated) — at the full rate. Example: 18% IGST.

Imports: IGST at the applicable rate, payable at customs alongside Basic Customs Duty.

GST Rate Slabs

Compensation cess applies additionally on certain luxury and sin goods (tobacco, aerated drinks, motor vehicles) at rates from 1% to 22%.

Odoo GST Tax Code Setup

Odoo's India localization includes pre-configured tax codes:

• GST 5% (I) — Intrastate: 2.5% CGST + 2.5% SGST
• GST 12% (I) — Intrastate: 6% CGST + 6% SGST
• GST 18% (I) — Intrastate: 9% CGST + 9% SGST
• GST 28% (I) — Intrastate: 14% CGST + 14% SGST
• IGST 5% — Interstate: 5% IGST
• IGST 12% — Interstate: 12% IGST
• IGST 18% — Interstate: 18% IGST
• IGST 28% — Interstate: 28% IGST
• RCM — Reverse Charge Mechanism codes for specified goods and services
• Exempt — Zero-rated and exempt supplies
• Compensation Cess — Additional cess codes for applicable products

Odoo automatically determines whether to apply CGST+SGST or IGST based on the customer/vendor state vs. the company's state of supply.

HSN and SAC Code Management

Every product and service in Odoo must be mapped to an HSN (Harmonized System of Nomenclature) code for goods or SAC (Services Accounting Code) for services. These codes determine:

• Applicable GST rate
• E-invoicing classification
• Export HS code for customs
• GSTR-1 reporting category

Odoo maintains an HSN/SAC master that can be bulk imported and automatically populates these codes on invoices.

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E-Invoicing Integration

GSTN E-Invoice System

E-invoicing through the Invoice Registration Portal (IRP) is mandatory for businesses with aggregate turnover exceeding INR 5 crore. The IRP issues an Invoice Reference Number (IRN) and a digitally signed QR code for every B2B invoice.

E-invoicing workflow in Odoo:

1. Create invoice in Odoo (standard flow)
2. Odoo generates the e-invoice JSON in the prescribed schema (InvoiceFormat)
3. JSON is submitted to the IRP via API
4. IRP validates the invoice, generates the IRN, and returns a signed JSON with QR code
5. Odoo stores the IRN, signed invoice hash, and QR code
6. Invoice PDF is regenerated with the QR code and IRN
7. The e-invoice data auto-populates in GSTR-1 on the GST portal

Technical requirements:

• API integration with NIC (National Informatics Centre) IRP
• Digital certificate for API authentication
• JSON schema v1.1 compliance
• Retry mechanism for API failures (IRP may timeout during peak periods)
• Cancellation workflow (within 24 hours of generation)

E-Invoice for Credit/Debit Notes

Credit notes and debit notes also require IRN generation. Odoo handles this by:

• Linking credit notes to original invoices
• Generating separate IRN for each credit/debit note
• Maintaining the audit trail between original and corrective documents

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E-Way Bill Integration

E-Way Bill Requirements

An e-Way Bill is mandatory for movement of goods valued above INR 50,000 — whether for sales, purchases, inter-branch transfers, or job work.

Odoo E-Way Bill Integration

Odoo generates and manages e-Way Bills through the NIC portal API:

1. Auto-generation — e-Way Bill generated automatically when a delivery order is validated for goods > INR 50,000
2. Multi-vehicle — support for part-A (supply details) and part-B (vehicle details) with vehicle update for transshipment
3. Consolidated e-Way Bill — for transporters carrying multiple consignments
4. Cancellation — within 24 hours if goods are not transported
5. Extension — for delays beyond the original validity period

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TDS and TCS Under GST

TDS (Tax Deducted at Source) — Section 51

Government departments and certain establishments must deduct TDS at 2% (1% CGST + 1% SGST or 2% IGST) on contract payments exceeding INR 2.5 lakh.

TCS (Tax Collected at Source) — Section 52

E-commerce operators must collect TCS at 1% (0.5% CGST + 0.5% SGST or 1% IGST) on the net taxable value of supplies made through their platform.

Income Tax TDS

Beyond GST TDS, Income Tax TDS applies on various payments:

Odoo calculates TDS automatically on vendor bills based on the payment nature and deducts it at the time of payment or credit, whichever is earlier. Quarterly TDS returns (Form 26Q) data is generated from Odoo for e-filing.

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Indian Payroll in Odoo

Salary Structure

PF (Provident Fund) — EPFO

Odoo calculates PF contributions for both employer and employee, generates ECR (Electronic Challan cum Return) files for EPFO portal upload, and tracks UAN (Universal Account Numbers) for each employee.

ESI (Employees' State Insurance)

ESI contributions are calculated automatically and the ESIC challan is generated monthly.

Professional Tax

Professional tax varies by state (Maharashtra: INR 200/month for salary > INR 10,000; Karnataka: INR 200/month; etc.). Odoo applies the correct state-wise professional tax based on the employee's work location.

Income Tax (New vs. Old Regime)

India offers two income tax regimes. Odoo supports both:

New Regime (default from FY 2024-25):

Old Regime (with deductions under Section 80C, 80D, HRA exemption, etc.) remains available for employees who opt in.

Odoo calculates monthly TDS projections under the chosen regime and adjusts for investments declared under Section 80C/80D at year-end.

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Indian Chart of Accounts and Financial Reporting

Ind AS-Aligned Chart of Accounts

Odoo's Indian localization includes a chart of accounts aligned with Indian Accounting Standards (Ind AS):

• GST accounts — CGST/SGST/IGST input and output (separate accounts for each)
• TDS receivable and payable accounts
• PF and ESI payable accounts
• Income tax provision accounts
• Advance tax accounts
• Statutory reserve accounts

Statutory Reports

Odoo generates data for key Indian statutory reports:

• GSTR-1 — outward supplies (monthly/quarterly)
• GSTR-3B — summary return with tax payment
• GSTR-2B — auto-drafted ITC (for reconciliation)
• GSTR-9 — annual return
• Form 26Q — quarterly TDS return
• Balance Sheet and P&L — Schedule III format (as per Companies Act 2013)
• Tax audit report — data for Form 3CD (Section 44AB)

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Multi-State Operations

Multiple GSTIN Registrations

Businesses operating across multiple Indian states need separate GSTIN registrations for each state. Odoo handles this through:

• Multi-company or branch structure — each state operation can be a separate company or a branch with its own GSTIN
• Automatic CGST/SGST vs. IGST determination — based on supply state vs. billing state
• State-wise return filing — GSTR-1 and GSTR-3B generated per GSTIN
• Inter-state stock transfers — invoiced as deemed supply with IGST
• Input Service Distributor (ISD) — central procurement entity distributing ITC to branches

Place of Supply Rules

Odoo determines the correct place of supply based on GST law:

• Goods — location where movement terminates (or location of delivery for bill-to-ship-to)
• Services — generally the location of the recipient
• Immovable property services — location of the property
• Events — location of the event

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Implementation Considerations for India

Typical Timeline

Key Success Factors

1. HSN/SAC classification — get HSN codes right from the start; incorrect classification leads to wrong GST rates and assessment issues
2. Multi-GSTIN architecture — decide early whether to use multi-company or branch-based structure for multi-state operations
3. ITC reconciliation — set up GSTR-2B matching from day one to avoid ITC loss
4. E-invoicing testing — test with IRP sandbox extensively; production IRN generation is irreversible
5. Payroll regime choice — configure both old and new income tax regimes; employees declare their choice at year start

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Frequently Asked Questions

How does Odoo determine whether to charge CGST+SGST or IGST?

Odoo compares the state code in your company's GSTIN with the state code in the customer's GSTIN (or the place of supply for services). If both are the same state, it applies CGST+SGST at half the GST rate each. If different states, it applies IGST at the full rate. This determination happens automatically on every invoice line.

Can Odoo handle e-invoicing integration with the GSTN IRP portal?

Yes, Odoo's Indian localization includes direct API integration with the NIC IRP (Invoice Registration Portal). When you validate a B2B invoice in Odoo, the system generates the JSON payload, submits it to the IRP, receives the IRN and signed QR code, and embeds them in the invoice PDF. This is fully automated and handles error responses, retries, and cancellations.

How does Odoo manage e-Way Bills for goods movement?

Odoo generates e-Way Bills through the NIC e-Way Bill API when delivery orders are validated for goods exceeding INR 50,000. The system populates supply details (Part A) from the invoice and allows entry of transport details (Part B). It supports multi-vehicle scenarios, consolidated e-Way Bills, and cancellation/extension workflows.

Does Odoo calculate TDS on vendor payments automatically?

Yes, Odoo's Indian localization calculates income tax TDS based on the payment nature (Section 194C for contractors, 194J for professionals, 194I for rent, etc.) and deducts TDS at the prescribed rate. The system generates quarterly TDS return data (Form 26Q) and maintains PAN-wise TDS certificates (Form 16A) for vendors.

How does Odoo handle PF and ESI calculations for Indian payroll?

Odoo calculates PF contributions (12% employee + 12% employer, with the employer portion split between PF and EPS) based on basic salary plus dearness allowance. ESI is calculated at 0.75% (employee) and 3.25% (employer) for employees with gross salary up to INR 21,000/month. The system generates ECR files for EPFO and monthly challans for ESIC portal submission.

Can Odoo support the new income tax regime alongside the old regime?

Yes, Odoo supports both the new tax regime (default, with lower rates and fewer deductions) and the old regime (with Section 80C, 80D, HRA exemptions). Each employee selects their regime, and Odoo calculates monthly TDS accordingly. At year-end, the system generates Form 16 with the correct regime-specific calculations.

How does Odoo handle Input Tax Credit (ITC) reconciliation?

Odoo's ITC reconciliation module matches your purchase invoices against GSTR-2B auto-drafted data from the GST portal. It identifies matched, unmatched, and mismatched invoices, helping you maximize legitimate ITC claims while flagging discrepancies for resolution before filing. This is critical because unmatched ITC is blocked from claim.

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Getting Started with Odoo in India

India's GST ecosystem is the world's largest tax technology platform, and your ERP must integrate seamlessly with GSTN, e-invoicing, e-Way Bills, and the full spectrum of Indian statutory requirements. Odoo's Indian localization provides this integration out of the box, with active updates tracking every GST Council notification and Finance Act change.

ECOSIRE has deep experience implementing Odoo for Indian businesses across manufacturing, services, distribution, and e-commerce sectors. We understand multi-state GST complexities, Indian payroll requirements, and the operational needs of businesses across the subcontinent.

Explore our Odoo implementation services to learn how we deliver compliant, efficient Odoo deployments for Indian businesses. Contact us to discuss your requirements and get a customized implementation roadmap.