In a remarkable turn of events, e-way bill generation reached an unprecedented 10.32 crore in May, marking the second-highest figure ever recorded. Traditionally a quieter month, May’s surge can be attributed to a robust demand for electronic items and cooling products. This data, sourced from the GSTN, signifies the third instance of e-way bills surpassing the 10 crore threshold, with the peak recorded at 10.35 crore in March of this year and the previous second-highest at 10.03 crore in October of last year. The rise in e-way bill generation is poised to positively influence GST collections.
An e-way bill, an electronic document generated on a portal, certifies the movement of goods and indicates whether tax obligations have been fulfilled. According to Rule 138 of the CGST Rules, 2017, every registered entity involved in the movement of goods valued over ₹50,000 is mandated to generate an e-way bill, although this threshold can be lower for intra-state transactions.
Several factors contribute to the higher generation of e-way bills. Despite their longstanding presence in the Indirect Tax domain, the integration with e-invoicing and rigorous enforcement by mobile squads under the GST regime have successfully brought unorganized movements and supplies within the GST ambit.
Experts highlight that the uptick in e-way bill generation mirrors a significant increase in consumption across various sectors, driven by heightened economic activities necessitating transportation and logistics services. Parag Mehta, Partner at N.A. Shah Associates, notes that retail businesses across India experienced a sales boom in May, particularly in the consumer durables and electronics sectors. This spike in sales has naturally led to increased goods movement. Additionally, substantial rises in exports and imports have further fueled the increase in e-way bill generation, streamlining various sectors and boosting GST collections.
Ashok Kumar Batra, Chair of the Indirect Tax Committee at PHD Chamber of Commerce and Industry (PHDCCI), underscores the successful integration of technology and taxation systems as a critical factor behind the surge. The real-time tracking and monitoring capabilities of e-way bills enhance tax administration, curb tax evasion, and ensure the seamless flow of goods across state borders.
Batra further elaborates that while an increase in e-way bills typically signals higher goods supply and potential tax collection, historical data suggests that the correlation between e-way bill generation and GST revenue is not always directly proportional. Nevertheless, it remains a strong indicator of enhanced tax collection.
This rise in e-way bill generation not only reflects the vitality of the Indian economy but also underscores the effectiveness of the GST framework in capturing the full spectrum of goods movement, thereby enhancing revenue collection and promoting a more organized market environment.