E-way bill generation surged to 8.79 in July as against 8.61 in June, showing better demand. This could also have a positive impact on GST collection, which saw a third all-time high of ₹1.65 lakh crore in July.
The date for GST collection for August will be out on September 1. Apart from higher e-way bill generation, performance in the services sector has also been encouraging, as a quick survey-based index (Purchasing Managers’ Index for Services) rose to 13 years high of 62.3 in July. All of these could help in sustaining momentum or even accelerating it.
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 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.
Though there is no direct correlation between e-way bill generation and GST collection, still there is evidence indicating higher generation of e-way bills would lead to higher collection. Data from GSTN (the IT backbone of indirect tax levy) shows e-way bill generation crossed 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. However, e-way bill generation came down to 8.61 crore in June, yet collection went up to ₹1.65 lakh crore in July. It is also 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.