The Finance Bill, 2026, presented with the Union Budget 2026-27, introduces several indirect tax amendments primarily under:
- The Customs Act, 1962
- The Customs Tariff Act, 1975
- The Central Goods and Services Tax (CGST) Act, 2017
- The Integrated Goods and Services Tax (IGST) Act, 2017
The amendments focus on trade facilitation, export support, compliance simplification, and legal clarity, rather than broad-based rate changes.
This article provides a section-wise explanation of indirect tax amendments as legislated through Finance Bill 2026.
What the Indirect Tax Amendments Aim to Do
The indirect tax changes in Finance Bill 2026 seek to:
- Strengthen risk-based customs administration
- Facilitate exports and manufacturing
- Improve cash-flow efficiency for compliant businesses
- Clarify GST valuation, refund, and appellate provisions
- Provide limited, targeted relief to specific sectors
1. Amendments to the Customs Act, 1962
Finance Bill 2026 amends selected provisions of the Customs Act, 1962 to enable modernisation of customs processes.
Key legislative intent:
- Enable technology-driven and risk-based clearance
- Support trusted and compliant importers/exporters
- Reduce procedural bottlenecks without diluting enforcement powers
These amendments provide the legal framework; operational details will continue to be governed by notifications and circulars.
2. Deferred Customs Duty Payment for Trusted Manufacturers
The Bill enables a deferred duty payment mechanism for specified importers.
What the law provides:
- Legal backing to allow postponement of duty payment for eligible entities
- Applicability subject to conditions, safeguards, and notifications
Practical impact:
- Potential working-capital relief
- Benefits restricted to trusted, compliant manufacturers
⚠️ This is not an automatic entitlement and depends on eligibility criteria prescribed separately.
3. Risk-Based Recognition of Regular Importers
Finance Bill 2026 supports customs administration reforms by enabling:
- Recognition of regular importers with trusted supply chains within the risk management framework
- Reduced physical intervention where risk parameters permit
This aligns with existing AEO and RMS systems, without creating a new statutory category.
4. Electronic Sealing and Export Clearance Facilitation
The Bill provides legislative support for:
- Use of electronic sealing for export cargo
- Clearance from factory or warehouse premises to port, subject to controls
Objective:
- Improve export logistics efficiency
- Reduce port dwell time
Actual implementation remains governed by customs procedures and notifications.
5. One-Time Concessional DTA Clearance for SEZ Units
Finance Bill 2026 introduces a special one-time enabling provision for:
- Eligible SEZ manufacturing units
- Clearance of goods into the Domestic Tariff Area (DTA)
- At concessional customs duty rates, subject to conditions
This is a temporary relief measure, not a permanent change to SEZ law.
6. Customs Duty Exemptions Supporting Manufacturing
The Bill provides for specific customs duty exemptions, including:
- Parts used in microwave oven manufacturing
- Components and parts for aircraft manufacturing
- Raw materials for aircraft parts used in MRO activities, including defence-related units
These exemptions aim to support domestic value addition and reduce import dependence.
7. Export-Focused Customs Amendments
Finance Bill 2026 introduces targeted export facilitation measures:
- Increase in duty-free import limits for specified inputs used in seafood exports
- Extension of duty-free input benefits to shoe uppers, not limited to finished footwear
- Extension of time limits for export of finished goods in textile, leather, and footwear sectors
These measures benefit labour-intensive export industries.
8. Removal of Courier Export Value Cap
A significant indirect tax facilitation measure is the “Removal of the ₹10 lakh per consignment value cap” on courier exports.
Impact:
- Facilitates higher-value exports through courier mode
- Particularly relevant for MSME exporters, D2C brands, and e-commerce sellers
This change is legislative and enables corresponding procedural updates.
9. Amendments to the Customs Tariff Act
Finance Bill 2026 amends the First Schedule to the Customs Tariff Act, 1975., to achieve the following objectives:
- Enable rationalisation and restructuring of customs duty rates
- Align tariff structure with manufacturing and trade policy
Actual rate changes take effect through the Tariff Schedule, not through explanatory provisions.
10. GST Law Amendments under Finance Bill 2026
Finance Bill 2026 introduces limited but important amendments to GST laws.
CGST Act amendments include:
- Section 15: valuation-related clarifications
- Section 34: credit and debit note provisions
- Section 54: refund process refinements
- Section 101A: appellate mechanism adjustments
IGST Act amendment:
- Section 13: place of supply of services
These amendments aim to improve clarity, consistency, and procedural efficiency, not alter GST rates.
11. Practical Impact on Businesses
The indirect tax amendments primarily affect:
- Manufacturers and importers
- Exporters and SEZ units
- MSMEs and e-commerce sellers
- Logistics and warehousing operators
The overall emphasis is on process improvement rather than tax rate relief.
Who Should Track These Changes Closely?
- Chartered Accountants and indirect tax practitioners
- CFOs and finance heads
- Export-oriented units and SEZs
- MSMEs and online sellers
- Logistics and supply-chain businesses
Conclusion
Finance Bill 2026 positions indirect tax law towards:
- Facilitation over friction
- Risk-based enforcement
- Export competitiveness
- Technology-enabled compliance
Rather than altering tax rates, the Bill focuses on how tax laws are applied and administered.
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