Deloitte Calls for Comprehensive Reform in India’s Customs Law

India’s upcoming Union Budget is expected to focus on significant reforms in the country’s customs law, according to Saloni Roy, a partner at Deloitte India. In comments made during an interview with ANI, Roy emphasized the necessity for duty rate rationalisation and a thorough review of the existing customs framework.

Despite reforms in other tax areas such as income tax, excise, and the Goods and Services Tax (GST), customs law remains one of the few indirect tax regimes that has not undergone comprehensive reform. Roy pointed out that the current system features multiple duty slabs and inverted duty structures, which increase operational costs for critical sectors, including pharmaceuticals and agriculture.

Addressing the Challenges in Customs Law

Roy articulated that the upcoming budget presents an opportunity to address these longstanding issues within the customs framework. The existing complexities can hinder competitiveness, particularly in sectors where cost efficiency is crucial. She noted that these duty structures often result in higher costs for manufacturers and could have wider implications for pricing and supply chains.

While the GST policy is primarily determined by the GST Council, Roy mentioned that certain recent decisions may require legislative changes. Such adjustments could be included in the Union Budget, offering a pathway to alleviate some of the burdens placed on businesses under the current customs regime.

The anticipated reforms aim not only to streamline customs processes but also to foster domestic manufacturing. By reducing the compliance burden and rationalising duty rates, the government can enhance the operational efficiency of various sectors, ultimately supporting India’s broader economic goals.

Roy’s insights reflect a growing consensus among industry experts that comprehensive reform in customs law is not just beneficial but essential for sustainable growth. As the government prepares to unveil the Union Budget, the implications for businesses across the country could be significant, especially if the proposed changes are enacted swiftly.

In summary, the upcoming Union Budget could serve as a pivotal moment for India’s customs law, with the potential to address critical gaps and support the growth of domestic manufacturing. Stakeholders will be closely watching for specific announcements that could reshape the landscape of indirect taxation in India.