E-way bill generation surges to record high of 10.48 crore in July

E-way bill generation touched an all-time high of 10.48 crore in July, surpassing the previous high of 10.35 crore in March this year, GST Network (GSTN) data showed.

Although GSTN has not given any reason for the record rise, it could be attributed to multiple factors including improvement in consumption as well as compliance. Although there is no straight co-relation between e-way bill generation and GST collection, the former could have some positive impact on collection. Tax collected for goods consumed and services availed in July will be known on September 1, when the government releases monthly data.

This is the fifth time since the introduction of the e-way bill in 2018 and third successive time in the current fiscal when generation has crossed 10 crores in a month.

An e-way bill is an electronic document generated on a portal, evidencing the movement of goods. It also indicates whether tax has been paid for the moving goods. As per Rule 138 of the CGST Rules, 2017, every registered person involved in the movement of goods (which may not necessarily be on account of supply) of consignment value of more than ₹50,000 (can be lower for intra-state movement) is required to generate an e-way bill.

Experts attribute many reasons for the higher e way bill generation. Ankur Gupta, Practice Leader (Indirect Tax) at SW India said that businesses typically increase production and distribution in anticipation of the festive season which begins in August. This results in a higher movement of goods, and consequently, more e-way bills are generated in July as part of pre-festive preparations.

Additionally, the monsoon season often affects logistics and transportation. Companies may adjust their shipping schedules, either advancing or delaying shipments, leading to a temporary rise in e-way bill generation. “India‘s overall economic growth during this period has also driven higher demand for goods and services, naturally resulting in increased interstate and intrastate transportation of goods,” he said.

Mahesh Jaising, Partner with Deloitte, said that the sustained increase in e-way bill generation, especially with three consecutive months crossing the 10 crore mark, reflects not only a buoyant economy but also brings in a greater transparency and adherence to regulatory requirements. “The rise in core inflation to 3.4 per cent from 3.1 per cent in July further indicates renewed consumer demand. This trend is expected to positively influence GST collections, driven by improved compliance and the government’s push for technology-driven governance,” he said.

Now all eyes will be on collection in August. Rajat Bose, Partner, Shardul Amarchand Mangaldas & Co, said that given the buoyancy in GST collections due to increased compliances particularly generation of e-way bills and e-invoices, GST collections are likely to settle at an elevated level with a more robust economic recovery in the coming months. “However, it is to be kept in mind, that the intra-State e-way bills resulting in CGST plus SGST revenue will be more relevant from the GST revenue point of view as IGST will largely be utilised as input tax credit in B2B supplies,” he cautioned.