In a clear sign of strong manufacturing activity, over 100 million e-way bills were generated in June for the shipment of goods within and across states. This milestone, achieved for the fourth time, underscores a vibrant end to the first quarter of 2024-25. E-way bill generation had previously crossed the 100-million mark in May with 103.1 million bills and set a record in March with 103.5 million. Last October also saw over 100 million e-way bills, according to the Goods and Services Tax Network (GSTN).
In comparison, June 2023 witnessed 86 million e-way bills. The taxes from these June transactions will be collected in July, likely boosting GST collections further. For the past four months, GST collections have surpassed ₹1.7 trillion, with June alone bringing in ₹1.74 trillion. In July 2023, GST collections stood at ₹1.65 trillion.
High-frequency indicators like purchase managers’ assessments and Indian Railways’ freight activity support this trend. S&P Global reported on July 1 that the HSBC India manufacturing PMI rose to 58.3 in June from 57.5 in May, indicating robust demand. This index, based on feedback from 400 manufacturing companies, signals improvement when above 50.
Indian Railways also reported a 10% year-on-year increase in originating freight loading for June, reaching 135.46 million tonnes, with freight revenue up by over 11%. However, the auto sector lagged, with retail auto sales growing just 0.73% year-on-year to 1.88 million units in June due to heatwave conditions and a delayed monsoon. June is typically a slow month for auto sales in India.
Abhishek Jain, indirect tax head and partner at KPMG, highlighted the significance of these trends in a popular news articles: ‘Sustained growth in e-way bill generation indicates continued economic activity and compliance with GST law, although economic growth and GST collections depend on various factors such as the value of taxable supplies and the growth of services.’
Overall, the surge in e-way bills suggests a consistent upswing in economic activities, reflecting a resilient manufacturing sector and a promising outlook for the country’s economic health.
The continued momentum in e-way bill generation augurs well for India’s economic outlook, supported by buoyant GST collections and improved freight activity. As economic indicators remain positive, businesses can leverage this data to strategise effectively amidst evolving market dynamics. Vakilsearch stands ready to assist businesses in navigating compliance requirements and seizing growth opportunities in an expanding economic landscape.
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