TaxTMI 
TaxTMI 
TaxTMI 
A. Customs
Policy direction: Clear shift towards tariff simplification, domestic manufacturing support, critical minerals security, defence & energy self-reliance, and reduced litigation.
Structural reforms:
- Customs law extended beyond territorial waters for fishing activities.
- Advance Rulings validity fixed at 5 years, improving certainty.
- Removal of officer permissions for warehouse-to-warehouse transfer ? ease of logistics.
Tariff rationalisation:
- Large-scale movement of exemption rates into Tariff itself, reducing dependence on notifications.
- Creation of new tariff lines for better product identification & monitoring (chemicals, pharma, agri, electronics).
Sectoral thrust:
- Critical minerals, EVs, semiconductors, renewable energy, defence, aircraft MRO, nuclear power receive duty relief.
- MSME protection via specific duty floors (umbrellas, parts).
- Concessional duty for SEZ sales to DTA
- Customs duty on personal imports reduced from 20% to 10%.
- 17 life-saving drugs fully exempt from customs duty
Passenger & trade facilitation:
New Baggage Rules 2026, monthly deferred duty payment, new eligible importer class.
Revenue balancing:
Some exemptions allowed to lapse; SWS extended to personal imports (9804).
B. Excise
Tobacco: NCCD rates revised, but effective tax unchanged for anti-evasion, not revenue shock.
Green energy push: Biogas/CBG portion excluded from excise valuation in blended CNG which is a strong clean-energy signal.
To control Inflation: Higher excise on unblended diesel deferred till 31.03.2028.
C. GST: Litigation Reduction & Export Relief
Trade-friendly changes:
- Post-sale discounts simplified: no mandatory pre-agreement linkage if ITC reversed.
- Provisional refund extended to inverted duty structure.
- No threshold for export refunds with payment of tax.
Institutional fix: Interim mechanism introduced for National Appellate Authority till formal constitution.
Major reform is that the Intermediary services place of supply shifted to section 13(2) which aligns with global GST norms, major relief for exporters.
Strategic Sectoral Initiatives
a. Infrastructure Connectivity
- Seven New High-Speed Rail Corridors announced connecting major economic centres (e.g., Mumbai-Pune, Hyderabad-Bengaluru).
b. Manufacturing & Technology
- Launch of India Semiconductor Mission 2.0 with ?40,000 cr outlay to strengthen chip ecosystem.
- Dedicated rare earth corridors in multiple states to boost critical mineral supply chains.
c. Agriculture Innovation
- Introduction of Bharat Vistar, a multilingual AI-driven agri-tool to enhance farm productivity.
Implication: Aggressive focus on strategic & high-tech sectors aligns with global competitiveness and import-substitution goals.
MSMEs & Entrepreneurship Support
MSME Growth Fund and enhanced liquidity support aim to ease credit access and scale small enterprises.
Social & Inclusive Measures
Budget emphasises inclusive growth through infrastructure in tier-2/3 cities, health and education investments, hence balanced regional development and human capital emphasis contribute to equitable economic expansion.
Compiled by CA Aman Rajput