With the e-way bills generated for inter-state trade in goods under the Goods and Services Tax (GST) regime in April turning out to be the second highest so far, the monthly GST collections may hit Rs 1.5 trillion benchmark again in May (April transactions).
E-way bills stood at 75.24 million in April 2022, up 28% on year, reflecting continued momentum in shipments due to rebound in economic activities as well as a low base effect. E-way bills in April had been just 4% lower than the peak achieved in the previous month.
E-way bills came in at 78.16 million in March, the highest monthly data since the online system was rolled out on April 1, 2018, reflecting an uptick in demand and shipments before the year-end. Monthly GST collections hit an all-time high of Rs 1.68 trillion in April (March transactions), broadly reflecting efficient plugging of tax evasion, a sustained shift of business to the formal sector of the economy and year-end bunching of tax payments by firms.
Bills generation rose 0.5% on the month in February to 69.15 million and March GST collections (February transactions) rose 6.8% on month to `1.42 trillion. The April e-way bills were up 9% over February, indicting that the GST collections will be robust in May as well, even though the capacity utilisation of trucks have moderated.
“Trucking capacity utilisation was about 80% in April compared with approximately 95% in March and 85% in February,” Abhishek Gupta, joint secretary, All India Transporters Welfare Association (AITWA), told FE. Almost 99% of e-way bills are generated under the road category.
Continued buoyancy in GST collections for several months in a row would help allay the state governments’ concerns about a revenue shock they might have to deal with once five-year revenue protection ends on June 30.
For the Centre, the high mop-up would mean its share of the tax as Central GST would be higher than the budget estimate of Rs 6.6 trillion for FY23.
Given that an incipient pick-up in consumption has resulted in a more-than-proportionate jump in GST revenues, a stronger economic recovery could allow the collections to settle at an elevated level, proving the high revenue productivity of the broad-based consumption tax.
The continued momentum in high GST receipts from July 2021 onwards yielded an average of gross GST of Rs 1.23 trillion in FY22, up 29% on year. Officials reckon that monthly GST revenues may average Rs 1.35 trillion or so in FY23, up 10% on year, compared with Rs 1.2 trillion factored in the Budget for the year.