Announcement of customs duty waiver scheme possible in the budget

This year, people have high expectations from the upcoming budget. Meanwhile, it is believed that to reduce litigation and promote business ease, Finance Minister Nirmala Sitharaman may announce a waiver scheme for customs duty in the upcoming budget.

In fact, Anurag Sehgal, Managing Director, Price Waterhouse & Co. LLP, says that the main demands of the industry will definitely be in line with the objectives of the government and one of the objectives of the government is to reduce litigation.

On this front, an amnesty scheme for customs duty, especially covering pre-GST legacy taxes such as additional duty, and special additional duty has been one of the industry's demands. The government had earlier announced amnesty schemes for excise duty service tax and income tax, but no such move was taken for customs duty.

According to an estimate, more than 40 thousand cases related to customs alone are pending in various courts and tribunals. The consultancy firm says that customs-related cases have been pending for a long time on various platforms. Both the taxpayer and the government need to spend a lot of time and effort to resolve them.

At the same time, EY India has suggested that a one-time dispute, litigation resolution, or settlement scheme should be introduced under the customs law to settle and resolve pending disputes. According to Mahesh Jaisingh, partner at Deloitte India, the government should end long-running litigation to resolve disputes. The burden of the judicial process should be reduced and the law should be upgraded to keep pace with technological advancements and international best practices.

Jaising said an amnesty scheme on the lines of Sabka Vishwas would be a welcome move. The industry has been waiting for such a scheme to resolve pending litigation cases under customs for years. This will help small businesses in particular avoid past disputes and move forward with a clean image.

Sehgal said another important wish of the industry on customs would be to rationalize rates to support the 'Make in India' initiative. He said you have the Production Linked Incentive (PLI) scheme, and phased manufacturing programmes coming up in many sectors. So rationalising rates will boost investment in India.

Further, he said the industry is expecting a review of exemptions. The review of exemptions is very important as some exemptions have expired. Sectors like green tech, MSME, and healthcare want the exemptions to be reviewed and extended.

The Indian Biogas Association (IBA) has written to the Finance Ministry seeking full corporate tax exemption for compressed biogas (CBG) production in the forthcoming Union Budget. According to IBA, this will attract investments in the sector and help achieve the goal of promoting renewable energy.

In a letter to Finance Minister Nirmala Sitharaman earlier this month, the industry body said this would work as an incentive for those business sectors which were willing to invest and scale up CBG production along with contributing to clean energy generation.