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India Weighs Customs Overhaul to Cut Duty Slabs in Budget 2026

Officials expect measures to cut litigation, aligned with GST, to be outlined on February 1.

Overview

  • The government is considering shrinking the number of customs duty slabs to five or six from the current eight, with an announcement expected in the Union Budget 2026.
  • The CBIC is working to synchronise the customs regime with the revamped GST to create a more coherent indirect tax system.
  • The review targets long-running pain points by addressing classification disputes, correcting inverted duty structures, and curbing discretionary exemptions.
  • The Centre is evaluating a rework of duty treatment between SEZs and domestic tariff areas as part of broader SEZ reforms.
  • A parliamentary panel recorded 75,592 pending customs cases and Rs 24,016.20 crore in arrears as of December 2024, fueling industry calls for an amnesty in non‑wilful cases.