GST E-way bill generation increases to 9.52 crore in December; Sees Second Highest Surge

The number of e-way bills generated in December was 9.52 crore, the second-highest monthly amount to far. The e-way bills generated in December could have an influence on GST collections in January and February.

After reaching a record high of 10.03 crore in October 2023, e-way bills dropped dramatically to 8.75 crore in November.

The December total could be due to increased year-end dispatches, particularly in electronic items and autos. Furthermore, increased compliance resulted in higher e-way bill production.

“The rise in the e-way bill generation can be attributed to increased consumption which indicates an initial trend of growth in economic demand and supply chain,” according to one of the experts.

Furthermore, the effects of this tendency would be evident in macroeconomic indices, however with a time lag. Increased monitoring by revenue authorities and improved taxpayer compliance have also contributed to an increase in e-way bill generation.

An e-way bill is an electronic document generated on a portal that records the flow of goods and indicates whether or not tax has been paid. As per Rule 138 of the CGST Rules, 2017, every registered person who causes the movement of goods (not necessarily on account of supply) with a consignment value of more than Rs.50,000 (may be lower for intra-state movement) must create an e-way bill.

Another expert stated that the growth in e-way bill generation numbers is indicative of two trends: higher compliance and increased economic activity. Both of these should result in an increase in tax collections. Another expert stated that the year-end drive on e-waybill generation can be due to manufacturers’ year-end discounts on vehicle, electronic, and apparel sales. Auto sellers like to unload their inventory in the same year by offering enticing discounts, resulting in significant year-end sales.

“Similarly, in the case of electronics, year-end reductions are made to clear out inventory, resulting in greater sales. At the same time, discounts offered by the apparel sector for winter clearance sales boost garment sales, resulting in increased movement of products and the issuance of waybills,” he further stated.

“If the increased e-way bill generation is on account of higher sales to dealers/stockists, without a corresponding increase in sales to end consumers, the GST revenue would remain static because the GST paid by the companies would be readily accessible as input tax credit to the dealers/stockists, resulting in no net increase in GST collections,” according to another expert.

He had a slightly different perspective. “The continued growth in e-way bill generation is expected to be reflected in the GST collection data for the same month, which will be released in January 2024. The increased collections would undoubtedly help the government meet its fiscal deficit target,” he added.