Union Budget 2026-27: Customs Overhaul and TDS Rationalisation Top Industry Wishlist
With the Union Budget for the fiscal year 2026-27 on the horizon, business leaders and economic analysts are setting their sights on a series of pivotal reforms aimed at enhancing India's trade competitiveness and streamlining tax administration. Among the most anticipated measures are a comprehensive overhaul of the customs duty structure and a rationalisation of the Tax Deducted at Source (TDS) framework. These expectations stem from a growing consensus that simplifying these areas is crucial for fostering a more business-friendly environment and stimulating economic growth.
Customs Duty Reforms: A Push for Trade Facilitation
Industry stakeholders are advocating for a significant revamp of India's customs duties, which have long been criticised for their complexity and high rates in certain sectors. The proposed overhaul is expected to focus on rationalising tariff lines, reducing import duties on raw materials and intermediate goods, and aligning the structure with global trade practices. This move is seen as essential for lowering production costs, boosting manufacturing output, and making Indian exports more competitive in international markets. Additionally, there is a strong call for digitising customs processes to cut down on delays and corruption, thereby improving the ease of doing business.
TDS Rationalisation: Simplifying Compliance Burdens
Another key area of focus is the rationalisation of the TDS regime, which currently involves multiple rates and thresholds that often confuse taxpayers and increase compliance costs. Experts are urging the government to consolidate TDS provisions, standardise rates across various transactions, and raise exemption limits to reduce the administrative burden on small businesses and individuals. Such reforms could lead to greater tax efficiency, encourage higher compliance rates, and free up resources for productive economic activities. The rationalisation is also expected to integrate better with the broader Goods and Services Tax (GST) framework, creating a more cohesive indirect tax system.
Broader Economic Implications and Stakeholder Hopes
Beyond customs and TDS, the Budget 2026-27 is anticipated to address other critical issues such as infrastructure funding, incentives for green energy projects, and support for the startup ecosystem. The overall goal is to craft a fiscal policy that not only addresses immediate economic challenges but also lays the groundwork for sustainable long-term development. As the government finalises its proposals, stakeholders remain hopeful that these reforms will translate into tangible benefits for the economy, driving job creation, investment inflows, and overall prosperity.
