Indian companies are gearing up for the Union Budget 2026-27 with a clear demand. They want a major overhaul of the customs duty system. Industry leaders seek a transformation similar to the GST rollout. This change aims to boost trade and simplify dispute resolution.
Key Industry Demands for Budget 2026
Businesses have outlined several critical requests. They want rationalization of customs duty rates. A reduction in the number of duty slabs is also high on the list. Currently, customs duty follows an eight-slab structure. Industry experts push for cutting this down to five or six slabs.
Another crucial demand involves the introduction of an effective single-window clearance system. This system would handle both imports and exports. Gulzar Didwania, Partner at Deloitte India, explains the current challenge. He says importers and exporters must approach multiple ministries and departments for clearances. This makes trade operations cumbersome and time-consuming.
Single-Window System: A Long-Awaited Solution
Didwania points to an existing provision in the Customs Act. It already empowers authorities to act as a single window for licensing requirements. The industry wants this facility launched quickly. It would achieve the true spirit of single-window clearance and streamline trade processes.
Addressing Dispute Resolution and Litigation
Dispute resolution has become a major pain point for businesses. A staggering Rs 1.52 lakh crore in customs duty remains stuck in legal cases. Till March 2024, a total of 38,014 cases involved this amount. The industry demands digitization of the entire litigation process under customs.
Saurabh Agarwal, Tax Partner at EY India, highlights the need for a Customs Dispute Resolution Scheme. He notes that schemes like "Sabka Vishwas" and "Vivad se Vishwas" helped clear backlogs in other tax areas. No comparable scheme exists for customs disputes. Agarwal suggests covering cases pending up to the Tribunal level.
He emphasizes a shift in approach. The scheme should move from complete settlement of pending litigation to issue-wise or year-wise settlement. This pragmatic move would unlock stuck revenue. It would also create a predictable tax environment for global investors.
Authorised Economic Operator (AEO) Certification
The AEO scheme is another area of concern. Industry representatives seek clearly defined timelines for granting AEO certification. Importers, exporters, and customs brokers with AEO status receive facilitation support from overseas customs authorities. This support improves efficiency in global trade operations.
Didwania also mentions the need for a formal charter. This charter would govern investigations by the Directorate of Revenue Intelligence (DRI). The government has issued operational guidelines for the Directorate General of GST Intelligence under GST. A similar framework is expected for the DRI to bring clarity to its investigative processes.
Supporting Make-in-India and Economic Goals
Abhishek Jain, Partner and National Head of Indirect Tax at KPMG, connects these demands to broader economic objectives. Against the backdrop of global uncertainty and tariff wars, industry expectations include greater predictability. Stronger policy support for Make-in-India is also crucial.
Jain says businesses want rationalized customs duties on key raw materials. Fewer duty slabs would reduce compliance issues. A one-time window to clear legacy disputes is another practical step. He also suggests speedy closure of related-party valuation approvals for importers. Post-clearance risk-based audits could replace the current tedious process.
These changes would improve ease of doing business and supply-chain efficiency. Achieving the goal of a $5 trillion economy requires tax certainty and stronger support for manufacturing. The industry believes Budget 2026 presents a perfect opportunity to implement these reforms.
