Budget 2026: Industry wants GST-like simplification for customs duty
What's the story
Ahead of the upcoming Union Budget, Indian businesses are pushing for a GST-style simplification of the customs duty regime. The move is aimed at boosting trade facilitation and streamlining dispute resolution. The key demands include rationalization of customs duty rates, lowering the current eight-slab structure to five or six, and also introducing a single-window clearance mechanism for imports and exports.
Demand
Industry seeks clarity and efficiency in customs processes
The industry wants a clear timeline for Authorized Economic Operator (AEO) certification and a charter for the Directorate of Revenue Intelligence (DRI) to conduct investigations. On dispute resolution, businesses are calling for digitization of the entire litigation process and a scheme to resolve ₹1.52 lakh crore in customs duty currently tied up in legal disputes.
Trade challenges
Operational hurdles and need for single-window clearance
Deloitte India Partner Gulzar Didwania stressed the operational challenges faced by traders. He said importers and exporters have to approach different government departments for shipment clearances, which hampers trade. Didwania also emphasized the need for a single-window clearance mechanism under the Customs Act to simplify import-export related licensing requirements.
Scheme expectations
AEO scheme and DRI guidelines
The industry wants strict timelines for AEO certification as this recognition helps importers, exporters, and customs brokers get trade facilitation benefits from foreign customs administrations. Didwania also called for similar guidelines or a charter for the DRI as provided under GST law. EY India Tax Partner Saurabh Agarwal stressed that fiscal policy should provide tax certainty and support manufacturing competitiveness to achieve India's $5 trillion economy goal.
Resolution strategy
Advocacy for customs dispute resolution scheme
Agarwal noted that while Sabka Vishwas and Vivad se Vishwas schemes cleared central excise, service tax, and income tax disputes, no such parallel framework exists for customs. He suggested bringing a customs dispute resolution scheme covering cases pending up to the tribunal level. The scheme's architecture must shift from 'complete settlement of a pending litigation' approach to an 'issue-wise' or 'year-wise' settlement mechanism.
Policy support
KPMG India calls for support for Make-in-India
KPMG India's Abhishek Jain said amid global uncertainty and tariff wars, the industry is looking to Budget 2026 for stronger support for Make-in-India. He called for a rationalization of customs duties on key raw materials, a simplification of duty slabs to reduce compliance friction, and also a one-time window to resolve legacy disputes and litigation.