E-Way bills for hosting the February show

The number of e-permits issued for the movement of goods within and between states fell in February month-on-month but remained above the 80 million mark recorded since November.

At 81.8 million, e-way invoice generation points to a drop mid-quarter, but year-end company destocking could boost goods shipments in March. E-Way billing data, a high-frequency consumption indicator, shows that the number of permits issued often spikes in the last month of each quarter. E-Way invoices in February indicate transportation activity in the month for which taxes are collected in March.

S&P Global earlier this month, citing February’s Manufacturing PMI, said India’s manufacturing sector had sustained robust output growth midway through the most recent fiscal quarter, but that it was mainly driven by the domestic market. It pointed to a notable slowdown in the pace of international sales expansion for the 400 surveyed companies. Although firms continued to expand their purchases of inputs, capacity utilization was not under pressure, S&P said on March 1, reporting its 20th straight month of output growth, with February manufacturing PMI at 55.3.

India’s exports have weakened since October on a fall in global demand. Excluding November, exports have declined in three out of four months since October.

“The number of E-Way invoices for February 2023 (81.8 million) needs to be seen in the context of an 18% increase over February 2022 (69.1 million) which bodes well for growth. Since February is a 28-day month, flat numbers were expected compared to January. We can expect e-way invoice generation to hit record levels in March 2023,” said Gautam Mahanti, Business Head at IRIS Business Services, which runs a private GST e-invoice registration portal.

According to Sanjay Chhabria, a director at Nexdigm, a business consultancy, the creation of e-bills of lading is an ancillary activity that drives the movement of goods, but the number of such permits issued in any given period cannot be directly linked to tax collections as instances such as internal inventory distribution or redistribution within a company across locations, require e-way invoices but cannot result in revenue collection.

“Nevertheless, with the upcoming celebrations in March and April, we could see another surge in goods consumption, which in turn should contribute to strong output growth,” Chhabria said.

A pick-up in economic activity will support GDP growth of 7% in FY23, after growth slowed to 4.4% in the third quarter, compared with an expansion of 5.2% in the same period last year.

India Ratings & Research said in an analysis on Monday that there are downside risks to the 7% growth forecast in the National Statistics Institute’s second flash estimate for FY23 and that actual GDP growth could be lower. Source: LiveMint

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