E-way bill generation in October has crossed 10 crore for the first time since its introduction. This could be a reflection of the festival demand which necessitated goods to be transported in large quantity.

Data from GSTN showed e-way bill generation touched 10.03 crore, surpassing the previous high of 9.34 crore in August, this year. Experts feel that apart from festival demand, higher compliance also contributed to high e-way bill generation. This will have some impact on GST collection for November. It is possible that the movement of goods might have occurred 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.

Tanushree Roy, Director (Indirect Tax) with Nangia Andersen India, said: “An all-time high e-way bill generation is indicative of increased economic activity. At the same time, the increase can be attributed to the ongoing festive and upcoming marriage season which is further expected to fuel consumer demand”.

An e-way bill is an electronic document generated on a portal, evidencing the 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 of more than ₹50,000 is required to generate an e-way bill. This is required for movements between the two States and within a State. However, a State or UT, with legislature, can decide the threshold for the value of goods to be applicable for movement within its boundary.

Gunjan Prabhakaran, Partner (Indirect Tax) with BDO India, said increase in e-way bill generation is because of the festive season purchases and replenishment of stocks by brands in the supply chain to meet the anticipated demand for the Diwali season. “Also, increased scrutiny by revenue authorities and better compliance at an assessees-end are some of the reasons for increase in e-way bill generation,” she said.

Other driving force

Echoing the sentiment, Vivek Baj, Partner with Economic Laws Practice, said while the primary reason in the surge appears to be higher volume of movement of goods, it is also a testament towards tighter anti-evasion methods adopted by GST mobile squad authorities stationed across India to ensure absolute compliance of law.

“For fear of seizure of vehicle, confiscation of goods and demand of tax along with equal amount of penalty that are being demanded by the authorities on account of minor lapses during movement of goods, the businesses are generating e-way bills regardless the minimum value of consignment,” he said.

The increasing number of these bills could have an impact on revenue collection, as evidence indicates that higher generation of e-way bills would lead to higher tax collection. For example, data from GSTN show e-way bill generation crossed an all-time high of 9 crore in March, resulting in an all-time collection in April at ₹1.87-lakh crore. Similarly, on a month-on-month basis, e-way bill generation rose to 9.34 crore in August, and collection in September rose to ₹1.63-lakh crore. Though e-way bill generation slowed a bit to 9.2 crore in September, collection surged to ₹1.72-lakh crore.