The supply chain activity gained momentum in September as e-way bill generation surged 18 per cent year-over-year to 109 million, according to GSTN data. The uptick, driven by the festive season, is a positive sign for GST collections and overall economic recovery.

E-way bills, or electronic permits required for inter-state goods movement, saw a 3 per cent rise from August levels. The festive season, extending from Raksha Bandhan in August to Christmas has historically boosted production, distribution, and sales.

The surge indicates higher raw materials, intermediates, and finished goods movement. This is likely to positively impact GST collections, which are closely tied to the volume of goods transported.

While manufacturing output grew in September, it did so at the slowest pace since January. The S&P Global’s HSBC India Manufacturing PMI dropped to 56.5 from 57.5 in August. Export orders also softened, capping growth potential in the sector.

Auto sales, a key indicator of consumer demand, showed signs of strain. Retail vehicle sales contracted by 9.26 per cent in September, despite an overall 6.5 per cent growth in the first half of the fiscal year.

In the first half of this fiscal, the average monthly GST collection reached ₹1.81 trillion.

“The significant increase in e-way bills in September can be attributed to various factors, including economic recovery, the onset of the festive season, improved GST compliance, and the ongoing digitalisation of supply chains,” said Rajat Mohan, senior partner at AMRG & Associates.

“The significant jump in e-way bill generation during September augers well for the GST collections in October,” said M.S. Mani, partner at Deloitte India.