New Delhi, Feb 1: Finance Minister Nirmala Sitharaman, presenting the Union Budget 2026-27 in the Parliament on Sunday, announced that the proposals for customs and central excise aim to further simplify the tariff structure, support domestic manufacturing, promote export competitiveness, and correct inversion in duty.
The new Budget proposes to reduce the tariff rate on all dutiable goods imported for personal use from 20 per cent to 10 per cent to rationalise the customs duty structure.
To provide relief to patients, particularly those suffering from cancer, the Budget proposes to exempt basic customs duty on 17 drugs or medicines. It also proposes to add 7 more rare diseases for the purposes of exempting import duties on personal imports of drugs, medicines and Food for Special Medical Purposes (FSMP) used in their treatment.
The Union Budget further proposes to revise provisions governing baggage clearance during international travel to address the genuine concerns of passengers. The revised rules will enhance duty-free allowances and provide clarity in the temporary carriage of goods brought in or taken out. Furthermore, the honest taxpayers will now be able to settle their dues and close cases by paying an additional amount in lieu of penalty, the Finance Minister said.
The Budget proposes many measures for customs processes to have minimal intervention for smoother and faster movement of goods and greater certainty for the trade.
The proposals include enhancing the duty deferral period for Tier 2 and Tier 3 Authorised Economic Operators, known as AEOs, from 15 days to 30 days. The Budget further proposes to provide eligible manufacturer-importers the same duty deferral facility, thereby encouraging them to get themselves accredited as a full-fledged Tier 3- AEO in due course.
The Union Budget also proposes to extend the validity period of the advance ruling, binding on Customs, from the present 3 years to 5 years. Government agencies will be encouraged to leverage AEO accreditation for preferential treatment in clearing their cargo, the Budget stated. Regular importers with trusted, longstanding supply chains will be recognised in the risk system, so that the need for verification of their cargo every time can be minimised.
Export cargo using electronic sealing will be provided through clearance from the factory premises to the ship, the Budget stated. For import of goods not needing any compliance, filing of a bill of entry by a trusted importer, and arrival of goods will automatically notify Customs for completing their clearance formalities, the Finance Minister said.
Sitharaman also announced that the Customs warehousing framework will be transformed into a warehouse operator-centric system with self-declarations, electronic tracking and risk-based audit. These reforms will move away from the current system of officer-dependent approvals and reduce transaction delays and compliance costs, she added.
–IANS