E-way bill generation came down to 8.60 crore in June as against 8.81 crore in May, but still higher than in April. This may have some impact on GST collection in July, for which data will be out on August 01.

E-way bill is an electronic document generated on a portal evidencing movement of goods and indicating whether tax has been paid. As per Rule 138 of the CGST Rules, 2017, every registered person who causes the movement of goods (which may not necessarily be on account of supply) of consignment value more than ₹50,000 is required to generate an e-way bill. This is required for movements between two states as well within a state. However, a State or UT with the legislature, can decide the threshold for the value of goods to be applicable for movement within its boundary.

Data from GSTN (the IT backbone of indirect tax levy) shows e-way bill generation crossed over an all time high of 9 crore in March, resulting in the all-time collection in April at ₹1.87 lakh crore. In April, the generation came down to 8.44 crore; subsequent collection in May was ₹1.57 lakh crore. In May, e-way bill generation rose to 8.82 crore and collection in June was over ₹1.61 lakh crore. Keeping this in mind, moderation in collection of July is expected. Now the expectation is the collection in July could be between ₹1.55 lakh crore to ₹1.60 lakh crore.

Monthly tax collection reflects goods, consumers and services availed during preceding months. It is also possible that the movement of goods might have taken in the same month of consumption or even a month before that, which is why e-way bill generation may have an impact on collection spreading over two months.

The first indication of the movement of goods and e-way bill generation can also be seen in Purchasing Managers’ Index (PMI) for Manufacturing, released by S&P Global. The S&P Global India Manufacturing PMI dropped to 57.8 in June 2023 from May’s 31-month peak of 58.7. A similar trend was observed in e-way bill generation too.

Though collection may come down from June, experts still believe buoyancy in the economy will positively impact collection. Gautam Mahanti, Business Head with IRIS Business Services, said gross GST collections of 1.61 lakh crore for June, registering ab 11.7 per cent YoY growth, is consistent with 11.5 per cent growth in May 2023. The domestic transactions have grown by a healthy 18 per cent YOY, which is also corroborated by the e-way bill transactions for the same period (8.81 crores in May 2023 vs 7.36 crores in May 2022) to compensate for the falling collections in import of goods. “The buoyancy in the state of economy is expected to continue giving a fillip to the increasing collections in the coming months,” he said.

Abhishek Jain, Partner & National Head - Indirect Tax KPMG in India, said: “With the approaching limitation period for 17-18 and continued focus on anti-evasion measures, the increasing trend in collections is expected to continue.“