Streamlined Customs Duties: Fostering Business Ease

The government has streamlined customs duty rates, reducing their count to eight, aiming to simplify business processes. Despite this rationalization, the effective duty rates remain unchanged by adjusting cesses. Experts note that the actual duty structure remains complex, with various additional levies contributing to numerous duty slabs.

The government has streamlined the structure of customs duty rates in a move aimed at simplifying business operations. This initiative slashes the number of levies to just eight, although the effective duty rates on most items remain unchanged due to adjustments in cesses, according to Finance Minister Nirmala Sitharaman.

In the recently announced 2025-26 Budget, seven tariff rates were removed, following the removal of a similar number in the 2023-24 budget. Ajay Srivastava, founder of GTRI, noted that this count only includes Basic Customs Duty (BCD) with ad-valorem rates, excluding numerous specific and mixed rates that create hundreds of slabs.

Deloitte India's Harpreet Singh stated that the Budget also proposes merging several high tariff rates into lower percentages, affecting products like chemicals, automobiles, and more. Indirect Tax leader Mahesh Jaisingh explained that very few tariff items saw a change in effective rates, as Agriculture Infrastructure Development Cess (AIDC) was imposed to balance reductions.