Economic Revival: E-way bills are the new yardstick this month

The daily average volume of e-way bills generated during the first week of May 2020 has doubled since April 2020. It indicates a rebound in our economy ever since the COVID-19 pandemic has hit India hard. 

The Goods and Services Tax Network (GSTN) registered an average daily generation of about 6 lakh e-way bills during this month till 11th May 2020. The spike in the levels can be seen when the nation-wide lockdown has partially been lifted in several non-vulnerable zones across the country. 

The GSTN web portal provides statistical information about the e-way bills generated M-o-M basis. The month of May 2020 has recorded a generation of 52.48 lakh e-way bills in eleven days as against 86.09 lakh e-way bills during the entire April 2020.

In February 2020, the government’s e-way bill portal had created an average of 19.70 lakh e-way bills per day. However, the daily average of e-way bills generated during March 2020, which is otherwise the busiest month of the financial year, fell to 13.10 lakh per day. It is due to the lockdown imposed over the last week of that month.

This data resonates with the IIP data for March 2020, where the factory output fell straight by 16.7%. Consequently, April 2020 has recorded the lowest daily average in the e-way bill generation. It is due to a total shutdown in most of the manufacturing and distribution activities, a Financial Express report suggests.

Also Read: States call on centre for real-time data access of GST returns, e-way bills

The steady rise in the number of e-way bills during the starting week of May 2020, in turn, suggests an increase in the volume of GST invoices issued during the week. It also hints at an overall increase in the production volumes across several industries.

As per the GST rules, e-way bills must be generated by any GST registered supplier or transporter or the recipient of goods, where the value of the consignment being transported exceeds Rs 50,000 for intra-state movements. It is compulsory irrespective of value for all the inter-state movement of goods.

The rise in e-way bill generation also reflects a possible modest growth in the GST collections for May 2020 in comparison to April 2020. Presently, due to the late fee waiver, taxpayers across the board are choosing to wait until June 2020 to pay taxes while filing their GST returns. 

As seen from the past, a significant portion of the GST revenue comes from the large taxpayers, and they also have better systems in place for compliance. Hence, the government continues to charge interest for delay in GST payments with some relaxation. For taxpayers with an annual turnover exceeding Rs 5 crore, an interest charge at 9% per annum applies after fifteen days from the due dates for any delay in GST payments from March 2020.

Yet, most of them have reportedly chosen to pay tax only while filing returns in June 2020. It can be further substantiated with the GST collections in April 2020 witnessing its all-time low of Rs 28,309 crore as on 29th April 2020, claimed as per several media publications. Hence, one has to wait for the official figures to be released after June 2020 to correlate it with the e-way bill data.

The CBIC has already twice extended the validity of e-way bills generated on or before 24th March 2020. Currently, the validity of an e-way bill is determined based on the nature of conveyance and the transport distance covered. This validity period may be extended at least eight hours before or after the expiry of the validity period.

As per the latest update for these e-way bills, where the validity had expired anytime between 20th March 2020 and 15th April 2020, then such validity period gets automatically extended till 31st May 2020. The extension provided allows trucks which have got caught while in transit to reach their destinations without hassles. 

Nevertheless, experts say that the movement of cargo will remain restricted to essential items unless the lockdown is significantly relaxed. The e-way bill numbers may remain small since state governments continue to worry about the free movement of non-essential commodities until the spread of the pandemic is limited. 

Hence, the government must consider extending the validity of the e-way bills for April 2020 as a relief to suppliers across the country. It will further help in boosting the slow economy.

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