December 2023 saw the generation of 9.52 crore e-way bills, the second-highest monthly total to date. The December-generated e-way bills might have an effect on the January and February GST collections.
The e-way bills fell precipitously to 8.75 crore in November 2023 from a record high of 10.03 crore in October 2023.
The December number might be the consequence of high year-end dispatches, particularly of cars and electronics. Additionally, a higher generation of e-way bills was a result of higher compliance. One of the experts stated, “The spike in the generation of e-way bills can be attributed to increased consumption which indicates the early trend of growth in economic demand and supply chain.” Moreover, macroeconomic indicators would eventually show the effects of this trend, if a little later. The increased scrutiny by revenue authorities and improved taxpayer compliance also contribute to the increased generation of e-way bills.
An e-way bill is an electronic document generated on a portal, evidencing the movement of goods and indicating whether tax has been paid or not. According to Rule 138 of the CGST Rules, 2017, each registered person who causes the movement of goods with a consignment value of more than ₹50,000 (which may be less for intra-state movement)—which may or may not be due to supply—must produce an e-way bill.
An increase in the number of e-way bill generation is indicative of two trends, according to another expert: improved compliance and a rise in economic activity. The ultimate result of both of these should be a rise in tax revenue. Another expert stated that the year-end push for e-waybill generation can be linked to manufacturer discounts on clothing, electronics, and car sales. Auto sellers prefer to sell out all of their inventory in a single year and provide enticing discounts to get rid of their stock, which boosts year-end sales.
“Similarly, in case of electronics, year-end discounts are offered to clear off stock leading to increased sales. At the same time, discounts offered by the garment industry for winter clearance sales also drive sales of garments, leading to increased movement of goods and issuance of way-bills,” he said.
What effect does the generation of more e-way bills have on tax collection? There are claims that an increase in end-user demand supported by improved compliance leads to an overall increase in GST collections. “There would be no net increase in GST collections if the increased e-way bill generation was caused by higher sales to dealers or stockists rather than a corresponding increase in sales to end consumers,” the spokesperson said. “This is because the companies’ paid GST would be available to the dealers or stockists as input tax credit.”
His perspective was a little different. The GST collection figures for the same month, which will be released in January 2024, are anticipated to reflect the continued momentum in the generation of e-way bills. The government’s revenue would unavoidably be supported by the higher collections in order to help it reach its fiscal deficit target, he said.
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