Finance Bill, 2026<\/a> introduces calibrated reforms across Customs, GST and Excise laws with a focus on tariff rationalisation, export facilitation, refund liberalisation and regulatory certainty. While the median Basic Customs Duty (BCD) remains at 10%, targeted sectoral adjustments and structural amendments signal a balanced policy approach combining trade facilitation with domestic manufacturing support .<\/span><\/p>\nI. CUSTOMS LAW AMENDMENTS<\/b><\/h1>\n(A) Composite Duty Introduction<\/b><\/h3>\n
From 2 February 2026, composite duties (ad valorem + specific rate) are introduced for:<\/span><\/p>\n\n- Umbrellas<\/span><\/li>\n
- Parts and accessories of umbrellas<\/span><\/li>\n<\/ul>\n
This measure aims to curb undervaluation and ensure minimum revenue realization .<\/span><\/p>\n(B) Reduction in BCD on Key Inputs (Effective 1 May 2026)<\/b><\/h3>\n
Significant rate reductions include:<\/span><\/p>\n\n- Makhana & prepared nuts: 150% \u2192 30%<\/span><\/li>\n
- Rare earth metals: 5% \u2192 Nil<\/span><\/li>\n
- Silicon (99.99% purity): 5% \u2192 Nil<\/span><\/li>\n
- Natural sands: 5% \u2192 Nil<\/span><\/li>\n
- Coal & lignite: 5% \u2192 2.5%<\/span><\/li>\n
- Ammonium nitrate: 10% \u2192 5%<\/span><\/li>\n<\/ul>\n
The objective is to lower raw material costs and boost domestic manufacturing .<\/span><\/p>\n(C) New Tariff Lines Introduced<\/b><\/h3>\n
New entries include:<\/span><\/p>\n\n- Krill (frozen) \u2013 15%<\/span><\/li>\n
- Pecans \u2013 30%<\/span><\/li>\n
- Blueberries \/ Cranberries \u2013 10%<\/span><\/li>\n
- Battery separators \u2013 5%<\/span><\/li>\n
- Refrigerated containers \u2013 5%<\/span><\/li>\n<\/ul>\n
This enhances classification specificity and reduces disputes .<\/span><\/p>\n2. Social Welfare Surcharge (SWS)<\/b><\/h2>\n
No structural change in levy.<\/span>
\n<\/span>However, technical alignment has been undertaken to ensure SWS follows revised tariff entries .<\/span><\/p>\nImpact:<\/b>
\n<\/span>Businesses must evaluate effective duty incidence considering both revised BCD and continuing SWS.<\/span><\/p>\n3. Agriculture Infrastructure & Development Cess (AIDC)<\/b><\/h2>\n
Aircraft tyres continue to attract AIDC @ 0.5%, with technical amendment to remove reference to omitted exemption entry .<\/span><\/p>\nNo rate change; only legal alignment.<\/span><\/p>\n4. Deferred Payment of Import Duty \u2013 Major Relief<\/b><\/h2>\n\n- Payment cycle extended from fortnightly to monthly.<\/span><\/li>\n
- Facility restricted to \u201celigible importers\u201d based on compliance record and risk profile .<\/span><\/li>\n<\/ul>\n
Business Impact:<\/b><\/p>\n\n- Improved liquidity<\/span><\/li>\n
- Enhanced risk-based facilitation<\/span><\/li>\n
- Greater compliance scrutiny<\/span><\/li>\n<\/ul>\n
5. Baggage Rules, 2026<\/b><\/h2>\n
Baggage Rules, 2016 superseded.<\/span><\/p>\nKey reforms:<\/span><\/p>\n\n- Clearer temporary import\/export provisions<\/span><\/li>\n
- Restructured Transfer of Residence (ToR) eligibility<\/span><\/li>\n
- Uniform procedures across airports .<\/span><\/li>\n<\/ul>\n
6. Customs Act Legislative Amendments (Effective 1 April 2026)<\/b><\/h2>\n(A) Fishing Beyond Territorial Waters<\/b><\/h3>\n\n- Fish harvested beyond territorial waters can be brought duty-free.<\/span><\/li>\n
- Fish landed at foreign ports treated as exports .<\/span><\/li>\n<\/ul>\n
Impact:<\/b>
\n<\/span>Boost to marine exports and clarity under maritime customs jurisdiction.<\/span><\/p>\n(B) Advance Ruling Validity Extended<\/b><\/h3>\n
Validity increased to <\/span>5 years<\/b> (earlier shorter period).<\/span>
\n<\/span>Existing rulings can be extended on request .<\/span><\/p>\nImpact:<\/b>
\n<\/span>Greater tax certainty in classification and valuation disputes.<\/span><\/p>\n(C) Inter-Warehouse Movement Simplified<\/b><\/h3>\n
Prior permission removed; subject to prescribed conditions .<\/span><\/p>\nImpact:<\/b><\/p>\n\n- Faster logistics<\/span><\/li>\n
- Reduced officer interface<\/span><\/li>\n
- Higher post-clearance audit focus<\/span><\/li>\n<\/ul>\n
II. GST AMENDMENTS (CGST & IGST)<\/b><\/h1>\n
Effective upon enactment unless otherwise specified.<\/span><\/p>\n1. Post-Supply Discounts Liberalised<\/b><\/h2>\n
Requirement of invoice-level pre-agreement removed.<\/span><\/p>\nCredit notes allowed subject to:<\/span><\/p>\n\n- Recipient reversing corresponding ITC .<\/span><\/li>\n<\/ul>\n
Impact:<\/b><\/p>\n\n- Reduced valuation disputes<\/span><\/li>\n
- Greater commercial flexibility<\/span><\/li>\n
- Possible scrutiny on genuineness<\/span><\/li>\n<\/ul>\n
2. Provisional Refund Extended to Inverted Duty Structure<\/b><\/h2>\n\n- Provisional refund benefit extended.<\/span><\/li>\n
- Threshold for export refund claims removed .<\/span><\/li>\n<\/ul>\n
Impact:<\/b><\/p>\n\n- Improved working capital<\/span><\/li>\n
- Faster ITC realisation<\/span><\/li>\n
- Increased refund compliance checks<\/span><\/li>\n<\/ul>\n
3. Interim Appellate Mechanism for Advance Ruling<\/b><\/h2>\n
Government empowered to authorise an interim adjudicatory authority until National Appellate Authority is constituted .<\/span><\/p>\nImpact:<\/b>
\n<\/span>Restores appellate remedy and reduces constitutional vacuum.<\/span><\/p>\n4. Intermediary Services \u2013 Place of Supply Shift (Effective 1 April 2026)<\/b><\/h2>\n
Place of supply shifted to <\/span>location of recipient<\/b>.<\/span><\/p>\nResult:<\/span><\/p>\n\n- Intermediary services to foreign clients may qualify as export of services .<\/span><\/li>\n<\/ul>\n
Impact:<\/b><\/p>\n\n- Zero-rated supply eligibility<\/span><\/li>\n
- Refund of ITC<\/span><\/li>\n
- Major boost for IT\/BPO\/consulting sector<\/span><\/li>\n
- Increase in refund claims<\/span><\/li>\n<\/ul>\n
This is one of the most business-friendly GST reforms in recent years.<\/span><\/p>\nIII. CENTRAL EXCISE CHANGES<\/b><\/h1>\n1. NCCD on Tobacco Products (Effective 1 May 2026)<\/span><\/h2>\nStatutory rate increased from 25% to 60%,<\/span>
\n<\/span>but effective duty incidence unchanged .<\/span><\/p>\nRevenue neutral restructuring.<\/span><\/p>\n2. Exemption on Biogas\/CBG in Blended CNG<\/span><\/h2>\nExcise duty exemption now covers:<\/span><\/p>\n\n- Entire value of biogas\/CBG<\/span><\/li>\n
- GST component on such biogas .<\/span><\/li>\n<\/ul>\n
Impact:<\/b>
\n<\/span>Promotes renewable fuel adoption.<\/span><\/p>\n3. Deferment of Additional Excise on Unblended Diesel<\/span><\/h2>\nProposed \u20b92 per litre additional duty deferred till 31 March 2028 .<\/span><\/p>\nImpact:<\/b>
\n<\/span>Prevents immediate inflationary pressure.<\/span><\/p>\nIV. SECTORAL IMPACT SNAPSHOT<\/b><\/h1>\n
<\/p>\n
\n\n\n| Sector<\/b><\/th>\n | Impact Summary<\/b><\/th>\n<\/tr>\n<\/thead>\n\n\n| Exporters<\/span><\/td>\n | Faster refunds, zero-rating benefits<\/span><\/td>\n<\/tr>\n | |