E-way bills likely to fall to lowest in a year in May 2021

E-way bills generated in May are likely to be the lowest in the past year, said experts, with daily average having dropped to 1.2 million for the month, owing to lockdowns in various states in the wake of Covid second wave.

Going by the daily average, for the full month of May, about 37-38 million e-way bills are expected to be generated, which may well be the lowest since June 2020 when 43.4 million e-way bills were recorded. As of May 16, 19.4 million e-way bills have been issued, according to data from Goods and Service Tax Network.

“Numbers indicate that May 2021 will have the lowest average of everyday e-way bills generated since last June 2020 last year,” said Rajat Mohan, senior partner at AMRG Associates.

“The lockdowns have limited the movement of non-essential goods and a large part of services sector, including hotels, airlines, cinema halls have been virtually closed and therefore supplies to the sector would also be impacted,” said Pratik Jain, partner at Price Waterhouse & Co, LLP.

Other than pharma and to some extent FMCG sectors, most other supplies relating to auto, electronics and construction have virtually stopped, he added.

Electronic bills generated for nationwide movement of goods of more than Rs 50,000 in value are one of the key economic indicators and relied upon to gauge the changes in demand and supply.

The lowest number of e-way bills recorded was in April 2020 at 8.6 million, when the country was under full lockdown, followed by 25.4 million in May 2020. Pre-lockdown monthly average last year was about 55 million, with daily average in January 2020 at about 1.83 million.

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Unlock 1.0 began from June 2020 when numbers started to rise again, showing spurt in economic recovery which continued into 2021. More than 60 million e-way bills were recorded in January and February, and the highest ever was clocked in March with 71.2 million.

However, April data showed slowdown with 58.7 million bills were generated, according to data from Goods and Service Tax Network.

Daily average in May so far has reduced by more 50% compared to the peak of 2.29 million in March 2021, and lower than 1.9 million per day in April.

Several states including Delhi, Maharashtra, Punjab, Uttar Pradesh, Jammu and Kashmir, Kerala, West Bengal have either announced full lockdowns or lockdown-like curfews curbing movement of people, in order to control the spike in Covid cases.

Despite the fall in e-way bills, sector watchers are divided on the impact that is expected to show in June as a dip in GST collections from the bills generated in May.

“The revenue may not be affected in the same proportion as the dip in number of e-way bills since services like banking, insurance, telecom, e-commerce for essentials et al have continued and thus may provide some cushion to the fall in collections that will reflect in June,” Jain said.

However, AMRG’s Mohan said, “The current month will have the most insufficient tax collections in the year 2021.”

GST collections have been surpassing the Rs 1 lakh crore mark for seventh straight months in a row during 2020-21, with April recording the highest ever of Rs 1.41 lakh crore.

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(The one-stop destination for MSME, ET RISE provides news, views and analysis around GST, Exports, Funding, Policy and small business management.)

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