Customs duty regime next in line for reform

Reforming India’s customs duty regime—by lowering rates on select goods, increasing transparency, and reducing official discretion—will be the next major economic reform push, Finance Minister Nirmala Sitharaman said on Saturday.

- HT Correspondent

A comprehensive overhaul of the customs framework would be the continuation of a series of economic and regulatory overhauls that have eased the burden of compliance for businesses and consumers. This year alone, the finance minister streamlined income tax laws with the Income Tax Act 2025, besides lowering slabs in the Union budget, and, as chairperson of the GST Council, ushered in changes that rationalised India’s indirect tax structure.

Speaking at the 23rd Hindustan Times Leadership Summit, the minister said the proposed customs reforms would be similar to the simplification undertaken in the Income Tax Act, which is being administered under a new statute starting this April.

"There are quite a few things to do," the minister said in response to a question on the next set of reforms being planned by the government.

"It is the complete overhaul of customs. We need to have customs a lot more simplified for people to feel that it is not too tiresome or cumbersome to comply with," Sitharaman said, adding that rules have to be made more transparent.

The finance minister noted that income tax reforms sought to address taxpayer grievances about the administration of the law on the ground, which was perceived to be "agonising." Assessments are now being done under a faceless regime to eliminate personal biases.

The proposed customs reforms will be comprehensive and entail duty rate rationalisation. "We have brought down customs duty over the last two years steadily. But in those few items where our rates are considered to be over the optimal level, we have to bring them down as well. Customs is my next big cleaning-up assignment," Sitharaman said.