A record 105.4 million e-way bills or electronic permits were raised for the shipment of goods within and across states in August, up 13% year-on-year, indicating robust manufacturing and trading activities. 

A total of 104.8 million e-way bills were generated in July, according to data from GSTN, the company that processes GST returns. 

The improvement in the movement of goods through the supply chain shows the build-up of stocks at wholesale and retail outlets ahead of the festive season. 

Strong economic indicators 

The August figures are in line with the purchase managers' survey projections. On 2 September, S&P Global said Indian manufacturers registered increases in business and production, albeit softer than a month ago but higher by historical standards. Moderation in input costs and demand resilience helped the growth. 

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Accordingly, the seasonally adjusted HSBC India Manufacturing Purchasing Managers' Index (PMI) was at 57.5 in August, above its long-run average of 54 but below July's reading of 58.1.

The automobile sector, another high-frequency indicator, saw a near 3% rise in sales in August, although commercial vehicle and tractor sales suffered due to weather-related disruptions and weak industrial demand, showed Federation of Automobile Dealers Association (FADA) data. 

With 16% excess rainfall in August impacting the retail auto market, dealers remain cautiously optimistic, pinning hopes on the festive season for further growth opportunities, FADA said in a 5 September statement. 

Weather-related uncertainties and high inventory levels remain a challenge for the sector. 

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Increased efficiencies 

The significant yearly rise in e-way bill generation in August shows higher logistical activities, suggesting that industries are responding to greater domestic demand and enhanced supply chain efficiencies, said Rajat Mohan, executive director at accounting and advisory firm Moore Singhi. 

"The increase in intra-state and inter-state transactions also points to broad-based economic growth, with manufacturing and retail sectors likely benefiting from an expansion in market opportunities. Additionally, the rise in e-way bills is a clear marker of increased business activities and smoother movement of goods, which aligns with India's ongoing economic recovery and expansion," said Mohan.

The surge in e-way bills reflects stronger adherence to GST regulations, showcasing businesses' enhanced level of compliance, Mohan said.

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He added that the consistent e-way bill generation growth could be attributed to advancements in the GST infrastructure and more rigorous enforcement of compliance measures. "This trend not only helps the government in better tax collection but also ensures greater transparency in the supply chain, reducing the scope for tax evasion," he said, adding that the data underlines the success of formalizing goods movement.

Taxes for the transactions in August are collected in September. GST revenue collections have shown consistent growth over the years. In each of the months so far this fiscal, GST revenue collection of the Centre and states has remained above ₹1.7 trillion after having touched ₹2.1 trillion in January.