Budget 2026 May Bring Fewer Duty Slabs, Lower Litigation For Importers
The Centre might be ready to give India’s complicated customs duty system a much-needed overhaul. According to reports, the government is mulling over reducing the number of customs duty slabs to only five or six, which is music to the ears of businesses overwhelmed by bureaucracy. Officials think that after last year’s major overhaul, there might still be possibilities to simplify tariffs, reduce disputes over classifications, and make the whole system more user-friendly.
The aim? Fewer grey areas, less litigation, and a system that truly supports national objectives. This could translate into less hassle and clearer rules for importers and traders, provided the proposal is included in Budget 2026.
Budget 2026 Announcement Likely
A report from a top publishing house citing a high-ranking government official says that the customs duty clean-up is not completed yet. Policymakers think that even after last year’s extensive rectification, further simplification can still be achieved. Over the past few months, the task has been quietly planned, and now the focus is on Union Budget 2026.
Will this budget period be the one to provide a more efficient and user-friendly customs structure? Importers and traders could have their calculators, and expectations, on standby.
Customs Duty Overhaul: Industry Concerns, Litigation Relief And Reform Push
- Industry Issues Under Review:
The government is reviewing the duty structure between Special Economic Zones (SEZs) and Domestic Tariff Areas (DTAs) as part of SEZ reforms aimed at resolving long-standing issues raised by businesses. - Litigation and Classification Disputes:
One of the key objectives is to reduce classification disputes, which are a major source of customs litigation. As of December 2024, more than 75,000 cases remained unresolved, involving outstanding arrears of ₹24,016.20 crore. Industry associations have sought an amnesty scheme for cases without wilful tax evasion. - Simplification as a Reform Priority:
Finance Minister Nirmala Sitharaman has emphasised that simplifying the customs duty structure remains a top priority in the government’s broader reform agenda.
CBIC Aims To Simplify Taxes By Aligning Customs With GST
The Central Board of Indirect Taxes and Customs (CBIC) is spearheading the process of aligning customs duties with the revised GST framework. The aim is to create a simpler, more integrated indirect tax system and ease the compliance burden for businesses dealing with both customs and GST regulations.
(With Inputs)
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