economy

E-way bills signal pickup in GST mop-up

E-way bills signal pickup in GST mop-up

Goods shipment within and across states picked up in the first half of December, recovering from a slight drop in November after the peak festive season, showed official data on e-way bills. Daily average generation of e-way bills needed for goods transportation stood at 2.2 million in the first 19 days of December, recovering from 2 million in November after a robust 2.37 million e-way bills generated in October. Indicators suggesting the robustness of the economic recovery would be a significant input to policymakers who are currently drawing up the contours of the Union budget for FY23 and the key fiscal numbers. Also, stable oil prices and the absence of another pandemic wave would be crucial for the economy in the coming months. Goods and services tax (GST) on transactions in December will be collected in January. After the initial impact of the second wave of the pandemic, both GST receipts of the central and state governments and the Centre’s direct tax collections have remained strong. GST collections grew from ₹92,000 crore in June to ₹1.31 trillion in November, the second-highest since GST roll-out in July 2017. The Union government said last week its net direct tax collection so far this year touched ₹9.45 trillion, growing 60.8% from the year-ago period. The indications are that the government may meet its ₹22 trillion gross tax collection target, although the same cannot be said about meeting the ₹1.75 trillion disinvestment target. Daily average generation of e-way bills is widely used as a yardstick to predict GST collections and, in turn, the economic activity, said Archit Gupta, founder and chief executive of Clear, an online tax filing service provider. “The holiday season has pushed sales across the country, which may have led to this uptick. These numbers are reflective of transport and economic activity. The volume of e-way bills generated in a month has had a direct impact on the monthly GST collections in the past, and we can expect the same to continue in the future as well unless there is a major GST rate overhaul in the upcoming month, Gupta said. The easing of the fiscal situation can potentially strengthen the government’s effort on infrastructure spending, which will have a multiplier effect on the overall GDP growth, D.K. Srivastava, chief policy adviser at EY India, said in a review of the economy on Thursday. The government should also ensure that the adverse impact of the highly contagious Omicron strain is kept well under control so that any subsequent lockdowns can be avoided, Srivastava said. GST being a tax on consumption, analysts closely watch e-way bill data as a lead indicator of economic activity. GST collections of central and state governments were impacted due to covid-related restrictions during the pandemic’s second wave earlier this year. Download.

economy 2021-12-24 Livemint