Improved compliance along with strictness by filed formation led to e-way bill generation surged to all-time high at 10.54 crore in August, data from GSTN showed. This is the sixth time since the introduction of the e-way bill in 2018 and fourth successive time in the current fiscal when generation has crossed 10 crores in a month.
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 August will be known on October 1, when the government releases monthly data. E-way bill is one of the high frequency economic indicators and higher generation reflect betterment in the economy.
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.
Field formations
Experts feel that that strict action by field formations is one of key reasons for record generation. Vivek Jalan, Partner at Tax Connect Advisory Services LLP, said that the field formations and moving GST squads have been quite active of late in detaining vehicles with no e-way bills, discrepant e-way bills, expired e-way bills, etc. Most of the GST cases being filed in High Courts today are regarding interception due to discrepancies in e-way bills.
In-fact most of the cases pending to be filed before the GST Tribunals to be formed going forward, would also be regarding discrepancies in e-way bills. “Many of these cases would certainly be disposed o in favour of taxpayers, but the liquidity crunch faced due to a pre-deposit of 200 per cent of tax amount is certainly a hardship, he said. Further, he emphasised that it is the field enforcement actions which is the primary reason for the surge in e-way bill generations and robust compliance in this regard. Going forward too “we expect that e-way bill generations would be impacted by the level of stringency in field actions,” he said.
Strong demand
Some opined that higher generation could be attributed to improved situation in the economy. Harsh Bhuta, Partner, Bhuta Shah and Co LLP, said the record high generation of e-way bills in August highlights strong demand conditions in the Indian economy, reflecting not only improved compliance but also the success of government monitoring efforts.
“Coupled with a rise in the HSBC Manufacturing PMI for India, this underscores the economy’s resilience, driven by sustained domestic consumption and increased manufacturing and trading activities,” he said.