Upsurge In way bill Generation Post Second Wave

Rise In Way Bill Post Second Wave

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What can the E-way Bill Data Tell us About the Indian Economy?

An electronic way bill (or e-Way bill) has several uses. One of the uses of issuing and maintaining a record of such documents is easy calculation of one’s final GST dues. Additionally, e-Way bills also help taxmen with keep a track of the movement of goods. Moreover, the number of eway bill generation during a particular period can also give one an indication of how the Indian economy is performing at the moment and how it can act in the future. But before we understand this, let us go through the concept of an eway bill to jog your memory. 

What is an Eway Bill?

An eway bill is an electronically-generated document that individuals must carry if they are responsible for the movement of goods that exceed ₹50,000 in value. The concept of an eway bill was first introduced by the GST council on July 1, 2017, to accurately calculate GST collection.

E-way Bill Validity

Eway bills are only valid for a certain period of time. Their validity is based on the type of cargo that is being transported and the distance. Typically, an eway bill is valid for only one day. However, depending upon the type of eway bill that has been generated, the validity of the same can be extended based on the distance covered. Some Eway bills will get their validity extended if you travel more than 20 kilometers or more in a day, while some other forms of eway bills will have their validity period extended if they just travel more than 10 kilometers.

How can Eway Bill Generation Data Predict Economic Growth?

An eway bill is issued for a particular consignment at a toll booth when it is crossing state borders. This implies that someone in a different state has placed an order for the said products. It also implies that the person in question has been indulging in economic activities themselves. An increase or decrease in the number of eway bills issued during a particular time period can indicate the relative pace at which the economy is growing or contracting when compared to historic data.

 

Below is an example that will help you understand the relationship between the variables considered during the issuance of an eway bill. It is essentially an eway bill issuance report released by the GST Council along with historical data from the months when India was facing the repercussions of the second wave of the coronavirus pandemic.

E-way Bills: June 2021 vs. May 2021

The generation of electronic way (e-way) bills as a part of the GST regime ended up gathering momentum in June 2021. The observation was made after it was revealed that a total of 3.28 crore eway bills were issued in that month, up from 2.45 crore eway bills issued in May 2021, almost a crore higher. The total invoice value of the eway bills generated in June is estimated to be at around ₹10.58 lakh crore as compared to the figure of ₹8.79 lakh crore posted in May.

 

Note that the month of May was when the second wave of the coronavirus pandemic in India was close to its peak and most economic activities around the country were on hold. May 2021 was also the month where the number of eway bills issued fell to a 12-month-low.

This jump of over 30% in the overall GST collectibles indicated a pick-up in economic activities post the second wave of the pandemic. Given that the restrictions on people working in factories and other corporate establishments are expected to ease in the coming months, the tax authorities are expecting a further jump in the number of eway bills being issued in a month.

 

As per the data provided by the government, the number of eway bills generated in the months of March and April stood at 6.72 crore and 5.73 crore, respectively, which were followed by a sharp decline in May. One of the reasons behind the decline was the laws surrounding working in factories and corporate establishments that had begun to become more stringent as the months passed by.

 

The sharpest decline in revenue collections was witnessed in the month of March. As per the official records, during March, a time when the country had gone into a state of a near-total lockdown once again, the invoice value of the total eway bills issued only amounted to ₹1.41 lakh crore.

 

GST collections in May (for sales in April) had shown the muted impact of the localised lockdowns in various states by topping ₹1 lakh crore for the eighth month in a row, but the sequential dip in May is expected to show up in June GST collections. You can see that the halt in economic activities have directly impacted the number of eway bills generated in the months when those restrictions were put into effect.

 

Now, let us take a look at some of the other aspects of the document in question. Below are the latest features that have been incorporated in the eway bill.

E-way Bill Features: What are the Additions?

The latest addition to the list of features of an eway bill is the inclusion of FASTag RFID trackers. These trackers have been integrated into an eway bill with the objective of helping tax authorities track the journey of vehicles in real-time through the eway bill online login portal. Additionally, it also helps the concerned officials in tracking down possible tax evasion attempts through the same eway bill login portals. This can also be done by pulling up real-time data from the respective eway bill systems.

 

You can learn more about the eway bill on Finserv MARKETS.