The implementation of GST has proven to have numerous advantages for all businesses. Due to its complex nature, it has minimised numerous issues businesses face. One of which was handling numerous tax-oriented paperwork.
GST, being the whole and sole tax an individual has to pay, has narrowed the effort of maintaining numerous tax files. Moreover, it further summarises GST filings, giving businesses an overview of their transactions.
If you do not know much about GST summary, read this article till the end. It will also cover the steps to generate a GST summary online. But first, let’s start by understanding what GST is in detail.
What is GST?
GST is a unified indirect tax system. It was introduced in India with the aim of simplifying the complex tax structure that prevailed prior to its implementation. This transformative tax change took effect on July 1, 2017, replacing a variety of indirect taxes levied by both the state and federal governments.
The primary objective of GST is to create a seamless and integrated national market by subsuming various taxes. This eliminates cascading effects and promotes a more efficient tax structure.
Some of the types of GST are:
1. Central Goods and Services Tax
The Central Government levies CGST on intra-state transactions. Revenues collected contribute to the national exchequer, funding central programs and initiatives. It promotes economic unity by standardising taxation across states.
2. State Goods and Services Tax
SGST is imposed by individual states and applies to intra-state supplies. Revenue generated directly funds state governments, promoting fiscal autonomy and regional development. It enables states to address specific financial needs.
3. Integrated Goods and Services Tax
IGST is for inter-state transactions and imports collected by the Central Government. The revenue is shared with states, facilitating seamless trade and ensuring equitable distribution. IGST simplifies taxation for inter-state commerce.
4. Union Territory Goods and Services Tax
Similar to SGST, UTGST is for Union Territories without legislatures. It applies to intra-territory transactions, and revenue supports local governance and development. UTGST ensures financial independence and growth for Union Territories.
Also Read: GST: Everything You Need To Know
How Does GST Work?
Goods and Services Tax revolutionises the taxation system by streamlining the process and reducing cascading effects. To comprehend how GST works, consider a product’s journey from manufacturing to retail:
Stage 1: Manufacturing
Imagine apparel manufacturing with a 10% GST rate. The manufacturer buys raw materials for ₹500, inclusive of a GST of ₹50. Adding ₹50 in value during manufacturing results in a gross product value of ₹550.
The total tax on the output is ₹55 (10% of 550). However, the manufacturer can offset this with the GST paid during raw material purchase, resulting in a final GST of INR 5.
Stage 2: Wholesale
The manufacturer sells the apparel to the wholesaler at a gross value of ₹550, inclusive of a GST of ₹55. The wholesaler adds a margin of ₹50, making the total ₹600.
The total tax on the final product is ₹60 (10% of 600). Similar to the manufacturer, the wholesaler offsets this with the GST paid during purchase, resulting in a final GST of ₹5.
Stage 3: Retailer
The retailer buys the apparel at a gross value of ₹600, inclusive of a GST of ₹60. Adding a margin of ₹50 brings the total cost to ₹650. The GST applicable here is ₹65 (10% of 650), but the retailer offsets it with the GST paid during purchase, resulting in a final GST of ₹5.
In the end, as the retailer sells the product for ₹650, the customer pays a GST of ₹65 (10% of 650). This expedited method avoids the tax-on-tax impact, resulting in a much reduced ultimate GST paid by the customer as compared to the prior tax system.
What is a GST Summary?
A GST Summary encompasses two distinct perspectives. A GST Summary for business refers to a specific report generated within the system. This report consolidates GST transactions for a specific period, detailing:
- Total sales/purchases
- Output GST/input tax credit
- Tax liability
- Breakdown of GST transactions by category or tax rate
It is a valuable tool for businesses to efficiently analyse and manage their GST-related financial activities.
What are the Components of a GST Summary?
The components of a GST Summary can vary depending on its purpose and target audience. However, some common elements are typically included:
- Taxpayer’s Name and GSTIN: It identifies the business or individual involved, ensuring accurate documentation.
- Tax Period: It specifies the timeframe covered by the report, providing context for the summarised transactions.
- Type of Return: It indicates the specific GST return (e.g., GSTR-1, GSTR-3B) to clarify the purpose and focus of the summary.
- Total Sales Value: The cumulative value of all taxable sales during the specified period, categorised by GST rate slabs (e.g., 5%, 12%, 18%, 28%).
- CGST/SGST/IGST Collected: It breaks down the collected Central GST (CGST), State GST (SGST), or Integrated GST (IGST) for each sales category, aiding in tax distribution analysis.
- Total Purchases Value: The aggregate value of all taxable purchases made during the reporting period, segmented by GST rate slabs.
- Input Tax Credit (ITC) Claimed: It reflects the eligible GST paid on purchases, showcasing the amount that can be claimed as a credit against GST liability.
- Net GST Payable/Refundable: The final amount indicating whether the business owes GST to the government (positive value) or is eligible for a refund (negative value).
- Late Payment Interest/Penalty: If applicable, disclose any additional charges incurred due to late filing or payment of GST.
- GST Breakdown by Category: Some summaries may provide further granularity, breaking down sales and purchases by product type, customer, supplier, or other relevant categories.
- Taxable Value and Exempted Value: It distinguishes between the taxable value (subject to GST) and the exempted value (not subject to GST) of transactions, if relevant.
- Comparative Analysis: It offers comparisons of current period data with previous periods, aiding in trend identification and performance evaluation.
How to Obtain a GST Summary?
Obtaining GST Summary is a crucial step for businesses to review and reconcile their tax transactions. Follow these steps to access and view the GST summary online on the official GST Portal of India:
- Step 1: Visit the official GST Portal.
- Step 2: Log in to your GST account using valid credentials.
- Step 3: Select the tab name “Services” on the top menu bar.
- Step 4: Choose the “Returns” option from the dropdown menu.
- Step 5: Click “View Filed Returns” from the available options.
- Step 6: Choose the specific type of GST return you want to review (e.g., GSTR-1, GSTR-3B). Select the relevant tax period for which you wish to view the summary.
- Step 7: The portal will display a summarised version of the selected return, providing key details such as total sales, purchases, tax liability, and Input Tax Credit (ITC) claimed.
Also Read: How to Easily Download Your GST Summary: A Step-by-Step Guide
What are the Common Challenges in Obtaining a GST Summary?
While GST Summaries offer valuable insights, obtaining them can present challenges. Some of these challenges are:
1. Technical Glitches and Portal Issues
Like any online system, GST portals can experience outages or slowdowns that disrupt access to information and services. Moreover, high traffic or technical issues can also lead to delayed responses and loading times, impacting the ability to generate summaries promptly.
2. Data Accuracy and Reconciliation
Summaries are only as reliable as the underlying data. Missing or inaccurate information in invoices, returns, or accounting records can lead to misleading summaries. Furthermore, inconsistencies between different data sources can also hinder reconciliation efforts and complicate the summary generation process.
3. Complex Compliance Requirements
Businesses often need to file multiple GST returns with varying formats and data requirements. This makes it challenging to consolidate information for summaries.
4. Technology Integration and Compatibility
Incompatibility between accounting software and GST portals can create seamless data exchange and summary generation hurdles. Some accounting software may also not offer comprehensive GST summary features, requiring manual calculations or workarounds.
5. Lack of Awareness and Expertise
Businesses, especially smaller ones, might lack in-house expertise on GST compliance and reporting, leading to errors or delays in obtaining summaries. Moreover, official guidance on generating GST summaries may be complex or not user-friendly, adding to confusion and potential mistakes.
7. Limited Access
Portal availability and technical support may be restricted during non-business hours or holidays. This hinders timely access to summaries.
Conclusion
A GST Summary is a significant tool for businesses that goes beyond its position as a collection of tax data. It is a dynamic tool that provides information on:
- Tax compliance
- Financial performance
- Operational efficiency
Furthermore, these summaries serve as critical historical data points for long-term financial planning. Businesses of all sizes may use GST summaries not only to negotiate the complexity of taxation but also to optimise operations.
Also Read: How do I get a GST Summary?
Frequently Asked Questions
Q1. How do I Download the GST Return Summary?
Follow these steps to access your GST Return details:
- Go to the GST Portal and log in to your account.
- Find the “Services” section.
- Choose the relevant Financial Year for the filed GST Return.
- Review the displayed information, including the Acknowledgment Number and Date of Filing.
- Explore the detailed Review page of your GST Return for comprehensive insights.
Q2. What is a GST Summary Return?
The document encompasses concise information on outward supplies, input tax credit claimed, and tax liability. It is essential to reconcile sales and input tax credit details with GSTR-1 and GSTR-2B before proceeding with the filing of GSTR-3B. This reconciliation ensures accuracy and compliance in the reporting of financial transactions, fostering a seamless and error-free filing GST summary process.
Q3. How do I Download an E-invoice Summary?
To access and download an e-invoice list in Excel format for a specific period, follow these steps using the “List of IRNs” tab:
- Find the “List of IRNs” tab on the designated platform.
- Choose the desired Financial Year and Month from the available options.
- Click the “DOWNLOAD E-INVOICE (Excel)” button to initiate the download process.
Following these steps, you can efficiently obtain and save the e-invoice list in Excel format for the specified period.
Q4. Can I File GST Without CA?
Previously mandatory for businesses over Rs. 5 crores, audit certification for GST returns is now optional. CBIC’s update allows self-certification, providing flexibility in compliance. Hiring a CA for filing remains a choice, not a mandate.
Q5. What is Generate Summary in GSTR 1?
Click the ‘Generate Summary’ button to initiate the process. The system will acknowledge the request, prompting the taxpayer to refresh the GSTR-1/IFF dashboard by clicking the refresh icon. Upon successful summary generation, a new ‘Proceed to File/Summary’ button will appear at the bottom of the GSTR-1/IFF page for further processing.
Q6. What is GST Summary and Scrutiny?
A GST officer conducts a detailed examination of a taxpayer’s GST return, assessing it against specific risk parameters to ensure accuracy. If discrepancies are identified, the officer issues a scrutiny notice, prompting the registered taxpayer to provide an explanation for the errors detected during the verification process.
Q7. Is GSTR 3B Mandatory?
Yes, it is essential to file GSTR-3B even when there are no sales or purchases in a given month. Compliance with GSTR-3B is mandatory for all normal and casual taxpayers, irrespective of the business activity or transaction volume. This filing ensures that your GST records remain up-to-date and in adherence to regulatory requirements.
Q8. Is GSTR 3B Monthly or Quarterly?
GSTR-3B is a monthly (quarterly for the QRMP scheme) self-declared summary GST return. It mandates taxpayers to report critical figures, including sales, Input Tax Credit (ITC) claimed, and net tax payable. This concise summary streamlines the filing process and facilitates the assessment of tax liabilities.
Q9. Is GSTR 2 Mandatory?
Every business in India registered under Goods and Services Tax is required to file GSTR-2. This return documents the purchases made by the enterprise in a specific month. GSTR-2 encompasses detailed invoice information regarding all supplies received, covering all purchase transactions, including those subject to reverse charges.
Q10. Who Should File a GST Return?
Regardless of the nature of the business or transactions, all business owners and dealers registered under the GST system must file GST returns. This obligation applies to both regular businesses and those registered under the Composition Scheme. Compliance with the GST return filing process is a fundamental requirement for entities operating within the GST framework in India.
