Budget 2026: Industry seeks GST-style simplification in customs duty; urges speeding up and simplification of clearences

Budget 2026: As the Union Budget for the financial year 2026-2027 draws closer, Indian companies are expecting a GST like transformation in the customs duty framework to promote trade facilitation and simplify dispute resolution.

Key demands include a rationalisation of customs duty rates, a reduction in the number of duty slabs, and the introduction of an effective single-window clearance system for imports and exports. Industry representatives are also seeking clearly defined timelines for granting Authorised Economic Operator (AEO) certification, along with a formal charter to govern investigations by the Directorate of Revenue Intelligence (DRI).




Dispute resolution has emerged as a major pain point. The industry wants the entire litigation process under customs to be digitised and a targeted mechanism introduced to release Rs 1.52 lakh crore in customs duty currently stuck in legal cases.

Deloitte India Partner Gulzar Didwania told PTI that the existing system forces importers and exporters to approach multiple ministries and departments for clearances, making trade operations cumbersome.

"That is becoming a big hindrance in doing trade. While I am ready to comply with all these things, but at least I should know that this is the department where I should go."

Didwania further added that under the Customs Act there is already a provision that empowers them to "act as a single window for all these import-export related licensing requirements. We want this facility to be launched as soon as possible, so that it actually achieves the real, true spirit of single window clearance."

Another area of concern is the AEO scheme, where industry wants fixed timelines for certification. Importers, exporters and customs brokers with AEO status receive facilitation support from overseas customs authorities, which helps improve efficiency in global trade operations.

Didwania also pointed out that while the government has issued operational guidelines for the Directorate General of GST Intelligence (DGGI) under GST, a similar framework is expected for the DRI to bring clarity to its investigative processes.

EY India Tax Partner Saurabh Agarwal said achieving the goal of a $5 trillion economy would require tax certainty and stronger support for manufacturing. He noted that dispute settlement initiatives such as the "Sabka Vishwas" and "Vivad se Vishwas" schemes helped clear backlogs under Central Excise, Service Tax and Income Tax, but no comparable scheme exists for customs disputes.

"To effectively arrest spiralling litigation, it is imperative to introduce a Customs Dispute Resolution Scheme covering cases pending up to the Tribunal level.

"Crucially, the architecture of this scheme must shift away from the "complete settlement of a pending litigation" approach to adopting an 'issue-wise' or 'year-wise' settlement mechanism. Such a pragmatic move would not only unlock stuck revenue but also foster a predictable tax environment essential for global investors," Agarwal said.

Till March 2024, a total of 38,014 cases involving customs duty worth Rs 1.52 lakh crore remain tied up in litigation.

KPMG Partner and National Head, Indirect Tax, Abhishek Jain said that against the backdrop of global uncertainty and tariff wars, industry expectations from the Budget 2026 include greater predictability and stronger policy support for Make-in-India. He said businesses are looking for rationalised customs duties on key raw materials, fewer duty slabs to reduce compliance issues, and a one-time window to clear legacy disputes.

At present, customs duty follows an eight-slab structure, with industry pushing for a reduction to five or six slabs.

Speedy closure of "related-party valuation approvals for importers with maybe post-clearance risk-based audits instead of the current tedious process is seen as a practical step towards improving ease of doing business and supply-chain efficiency," Jain added.