E-way bills generated by businesses for inter-state commerce in July were up 18% on year and 1.5% on month, suggesting that the goods and services tax (GST) collections in August could be upwards of Rs 1.5 trillion, which is becoming the new monthly normal.
At Rs 1.49 trillion, GST collections in July (June transactions) were up 28% on year and the second-highest ever, thanks to resurgent economic activities, improved compliance, high inflation and a broadening of the tax base.
The number of e-way bills stood at 75.58 million in July, the second-highest since the system was rolled out in 2018. It was 78.16 million in March 2022, resulting in a record Rs 1.68-trillion gross GST receipts in April 2022.
With a monthly average of Rs 1.5 trillion till July, FY23 gross GST receipts may exceed the target by Rs 3 trillion, allowing the Centre to appropriate an additional Rs 80,000 crore, after devolution to the states.
Stricter enforcement of compliance and rebound in economic activities are contributing to the buoyancy in GST receipts. The festival season, which will start soon, may further boost receipts.
The rebound in economic activities, leading to higher shipments, has also benefited the trucking industry, which is expected to see higher growth in revenues than seen a year ago despite an increase in fuel costs.
“We are expecting 15-20% growth in revenues in FY23 compared with 10-12% in FY22,” All India Transporters Welfare Association (AITWA) joint secretary Abhishek Gupta said.
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 rise in monthly gross GST collections has given some breathing space to the Centre to recalibrate an action plan on tax rates, as the shortfall in GST by states after the end of the compensation mechanism on June 30, may not be very large.