Free GST Billing Software in India (2026): What You Actually Get

TL;DR: The best free GST billing software lets you create GST 2.0-compliant invoices (5%, 18%, 40% slabs since 22 Sep 2025), generate e-Way Bill flags, and reconcile your bank account — at zero cost. The catch: most free tiers cap users, transactions, or e-invoice IRN generation, so read the fine print before committing.

Last updated: July 2026

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What Does GST 2.0-Compliant Billing Actually Require?

A valid GST 2.0 invoice must show the correct slab rate from the restructured two-slab system effective 22 September 2025: 5% for necessities, 18% for standard goods and services, 40% for luxury and sin goods, and 0% for essentials. The old 12% and 28% slabs no longer exist — any software still printing those rates is non-compliant today.

Here is what every tax invoice under the CGST Act must display:

• GSTIN of the supplier (and recipient for B2B)
• Invoice number and date (consecutive, financial-year series)
• HSN/SAC code — mandatory from 8 digits for turnover above ₹5 crore, 4 digits for ₹1.5–5 crore, 4 digits for below ₹1.5 crore (CBIC Notification 78/2020-CT as updated)
• Taxable value and the applicable GST rate (5%, 18%, or 40%)
• CGST + SGST (intrastate) or IGST (interstate) amounts separately
• Place of supply for interstate transactions
• IRN and QR code if your aggregate turnover exceeds ₹5 crore (e-invoice mandate, CBIC Notification 10/2023-CT)

Software that cannot print a 40% GST rate or that auto-populates the defunct 28% slab will cause you to issue defective invoices — attracting scrutiny at the GSTR-1 reconciliation stage.

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When Is the E-Invoice IRN Mandatory?

If your aggregate annual turnover crossed ₹5 crore in any preceding financial year, every B2B invoice must carry an Invoice Reference Number (IRN) generated from the GSTN's Invoice Registration Portal (IRP). This threshold has been at ₹5 crore since August 2023 and has not changed under GST 2.0.

Key e-invoice facts for 2026:

• Threshold: ₹5 crore aggregate turnover (preceding FY)
• Scope: B2B invoices, credit notes, debit notes
• Exemptions: SEZ suppliers, insurers, banking companies, GTA (Goods Transport Agency) — these categories remain exempt per CBIC notifications
• Penalty for non-compliance: Invoice treated as invalid; ITC denial for the buyer
• How it works: Your billing software pushes invoice data to the IRP via API, receives a digitally signed IRN + QR code, and embeds both on the final PDF

A free GST billing app that does not integrate with the IRP API is effectively unusable for any business above ₹5 crore turnover. Always verify IRN integration before selecting a free tool.

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QRMP Scheme: How It Affects Your Monthly Billing Workflow

Small GST taxpayers with aggregate turnover up to ₹5 crore can file GSTR-1 and GSTR-3B quarterly under the QRMP (Quarterly Return Monthly Payment) scheme, while still paying tax monthly using Form GST PMT-06. This means your billing software must support monthly invoice upload (IFF — Invoice Furnishing Facility) even if full return filing is quarterly.

Under QRMP:

• GSTR-1 (IFF): Upload B2B invoices monthly in months 1 and 2 of the quarter so your buyers can claim ITC promptly
• GSTR-3B: Filed quarterly; monthly tax payment via challan (PMT-06)
• Due dates: GSTR-3B for Oct–Dec quarter is due by 22nd or 24th of January (state-category dependent)

A billing tool that only lets you export invoices as PDFs — without structured JSON/API data for GSTN upload — will force you to re-enter data manually at filing time. That is a hidden cost of many free tiers.

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What Free GST Billing Software Tiers Typically Include vs. Omit

Here is an honest breakdown of what most free GST billing software products offer and where they draw the paid boundary:

Feature	Typical Free Tier	Typical Paid Tier
GST 2.0 invoice creation (5%/18%/40%)	✅ Usually included	✅ Included
Number of invoices per month	Capped (often 20–50)	Unlimited
E-invoice IRN generation (IRP API)	❌ Usually excluded	✅ Included
GSTR-1 / GSTR-3B auto-population	❌ Usually excluded	✅ Included
e-Way Bill generation	❌ Usually excluded	✅ Included
Bank reconciliation	❌ Usually excluded	✅ Included
Multi-user access	Single user only	Multi-user
Inventory management	❌ Usually excluded	✅ Included
Customer portal / CRM	❌ Usually excluded	✅ Included
Support (chat/phone)	Community/email only	Priority support

KARR's Free plan ($0, permanently free) is an exception to several of these norms: it includes GST invoicing, e-Way Bill flags, and bank reconciliation even at the free tier — features most competitors lock behind paid plans.

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KARR Free Plan: What You Get Specifically

KARR is cloud accounting software built by Chartered Accountant Ovais Shah (ICAI, IBBI Registered Valuer, HarvardX — Strategic Financial Analysis). Its Free plan is priced at $0 with no trial expiry.

What the KARR Free plan includes:

• GST 2.0-compliant invoice generation (5%, 18%, 40% slabs) with correct CGST/SGST/IGST split
• e-Way Bill flag alerts when a consignment value triggers the e-Way Bill threshold
• Bank reconciliation — match your bank statement lines to invoices and payments
• AI receipt OCR — photograph a purchase receipt and KARR extracts the vendor, amount, and tax
• "What Happened?" guided wizard — designed specifically for business owners who are not accountants, walking you through each transaction type in plain language
• Offline-first PWA architecture — works without an internet connection, syncs when reconnected

What requires upgrading to Pro ($12/month) or Business ($29/month):

• E-invoice IRN generation via IRP API integration
• GSTR-1, GSTR-3B, GSTR-9 auto-population and one-click submission
• Multi-user access and CA practice dashboard
• Payroll & HR, inventory management, fixed assets and depreciation
• Custom report builder, budgeting and variance analysis
• TDS/TCS compliance under Income-tax Act 2025 (s.392 salary TDS, s.393 table for contractor/professional/rent/commission/interest, s.394 TCS)

For a business below ₹5 crore turnover that files under QRMP and does not yet need IRN, the KARR Free plan covers the daily billing workflow without a forced upgrade.

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GST Registration Thresholds: Do You Even Need GST Billing Software Yet?

Before investing time setting up any GST billing tool, confirm you are actually required to register. The registration thresholds under the CGST Act are:

Business Type	General States	Special-Category States
Supply of goods	₹40 lakh aggregate turnover	₹20 lakh aggregate turnover
Supply of services	₹20 lakh aggregate turnover	₹10 lakh aggregate turnover
Mixed supply (goods + services)	₹40 lakh (goods threshold applies)	₹20 lakh

Special-category states include Manipur, Mizoram, Nagaland, Tripura, and others listed in Article 279A(4)(g) of the Constitution. Below these thresholds, GST registration is voluntary — but even voluntary registrants must issue compliant invoices once registered.

If you are below the threshold but issue invoices to GST-registered businesses, your customers cannot claim ITC on your bills. This makes voluntary registration commercially valuable in B2B contexts.

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South Asia GST/VAT Rate Comparison

For businesses that sell across borders or compare their tax burden regionally, here are the verified standard VAT/sales tax rates and corporate tax rates for India's South Asian peers:

Country	Standard Indirect Tax Rate	Corporate Tax Rate	Registration Threshold
India	GST: 5% / 18% / 40% (GST 2.0, from 22 Sep 2025)	22% (domestic); 15% (new manufacturers)	₹40L goods / ₹20L services
Pakistan	Sales Tax: 18% on goods (federal)	29%	Register with FBR for NTN + STRN
Bangladesh	VAT: 15%	27.5% (non-listed) / 20% (listed)	≈BDT 30 million annual turnover
Sri Lanka	VAT: 18% (since 1 Jan 2024, up from 15%)	30%	LKR 60 million/year (or LKR 15M/quarter)

Sources: CBIC (India), FBR (Pakistan), NBR (Bangladesh), IRDAI/IRD (Sri Lanka). All figures verified July 2026.

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Cash Transaction Limits That Affect Your Invoicing Records

One rule many small business owners miss: under sections 185–188 of the Income-tax Act, 2025 (which replaced the old section 269ST of the repealed 1961 Act), cash receipts of ₹2,00,000 or more from a single person — in a day, in a single transaction, or on a single occasion — are prohibited. Violations can attract a penalty equal to the cash amount received.

This matters for your billing software because:

• Your invoices should reflect the actual payment mode (cash vs. bank transfer)
• If a customer pays ₹2,00,000+ in cash against an invoice, your accounting record becomes evidence of the violation
• KARR's bank reconciliation and payment mode tracking help you flag cash receipts that breach this limit before they become a compliance issue

For MSME vendors registered under Udyam: under section 15 of the MSMED Act 2006, you must pay them within the agreed written period (maximum 45 days). Where there is no written agreement, payment is due within 15 days. Miss this, and the expense deduction is disallowed under sections 34–37 of the Income-tax Act, 2025 until payment is made.

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How to Choose the Right Free GST Billing Software for Your Business

Choose your free GST billing tool based on these decision criteria:

Choose a free tool if:

• Your turnover is below ₹5 crore (no IRN mandate yet)
• You file under QRMP (quarterly GSTR-3B, monthly IFF upload)
• You are a sole proprietor or small partnership with single-user needs
• You want to validate the software before committing to a paid plan

Upgrade to a paid plan when:

• Your turnover crosses ₹5 crore and IRN becomes mandatory
• You need GSTR-1 auto-population and one-click GSTN submission
• You hire staff who need separate logins
• You need TDS deduction tracking under Income-tax Act 2025 s.393 (contractor, professional, rent, commission, interest payments)

KARR's upgrade path is transparent: Free → Pro ($12/month) → Business ($29/month), with no hidden per-invoice fees. The "What Happened?" wizard means a non-accountant business owner can start generating compliant GST invoices in minutes, not hours.

Try KARR Free: Create your first GST 2.0-compliant invoice — with the correct 5%, 18%, or 40% slab — at no cost. No credit card required. Visit karr.pro.