In a significant pre-budget submission, the Federation of Indian Chambers of Commerce and Industry (FICCI) has presented a comprehensive set of recommendations for the Union Budget 2026-27, with tax and customs reforms taking center stage as the industry body's primary demands.
Taxation Overhaul: The Core Priority
FICCI has emphasized the urgent need for rationalizing the Goods and Services Tax (GST) structure, advocating for a simplified three-rate system that would streamline compliance and reduce the compliance burden on businesses across sectors. The industry body argues that this move would significantly enhance the ease of doing business in India.
Key tax proposals include:
- Reduction in corporate tax rates for all companies to boost manufacturing competitiveness
- Rationalization of capital gains tax structure to encourage long-term investments
- Extension of tax benefits for startups and new manufacturing units
- Simplification of tax deduction at source (TDS) provisions
Customs Modernization Initiatives
The industry body has called for substantial reforms in customs procedures, highlighting the need for faster clearance times and reduced documentation requirements. FICCI recommends adopting advanced technologies and risk-based assessment systems to modernize India's customs infrastructure.
"The current customs procedures often lead to delays and increased costs for importers and exporters. We need a more efficient system that aligns with global best practices," the submission noted.
Sector-Specific Recommendations
Beyond broad tax reforms, FICCI has proposed targeted measures for key sectors including manufacturing, exports, and green energy. The recommendations aim to address sector-specific challenges while promoting India's position in global supply chains.
The industry body's submission comes at a crucial time as the government begins preparations for the 2026-27 budget, which is expected to focus on sustaining India's economic growth momentum while addressing industry concerns about global competitiveness.
