The government remains open to the industry’s demand for a well-structured Customs Amnesty scheme, which was notably absent from the Union Budget for FY27 presented on Sunday, despite it figuring in the pre-budget wish lists.
A top finance ministry official, indicated that while the administration recognizes the need for such a mechanism to address legacy customs disputes, the challenge lies in designing an effective policy framework. “We worked very hard on the amnesty scheme for Customs but somehow it was not getting worked out…,” the official said, on condition of anonymity. “If there are ideas, we are still open to take it into consideration. We would like to do it if we get a good plan and we have time.”
The official said that any amnesty must be a broad-based policy rather than tailored to benefit select entities. “The government cannot give benefits to select entities. It has to be a policy. The industry should not come as an applicant but it should come with a plan for amnesty,” the official added.
Industry bodies and trade associations had widely anticipated a one-time amnesty or voluntary disclosure scheme for customs disputes in the Budget, modelled after successful past initiatives like the Sabka Vishwas (Legacy Dispute Resolution) Scheme for indirect taxes or similar GST amnesties.
Such a scheme was seen as critical to resolving long-pending litigations, unlocking working capital tied up in disputes and improving ease of doing business amid global trade uncertainties.
According to industry bodies, as of 2024, approximately over 40,000 litigations are pending under Customs demanding close to $4.5 billion.
Revenue Collection
On the revenue collection following the hike in securities transaction tax, the official said that the volumes may come down but the government’s estimate is of Rs 15000 crore to Rs 15,500 crore.
The budget projected gross tax buoyancy of 0.8 for FY27, lowest since Covid pandemic. The budget projected total tax collection for FY27 at Rs 44.04 lakh crore at a growth of 8% over the revised estimates for FY26.
The senior finance ministry official said that the low overall tax buoyancy projection of 0.8 is primarily due to a one-time base correction in FY27, which marks the first full financial year in which all major tax changes announced in 2025 will be fully reflected.
GST rate restructuring
He pointed to the GST rate restructuring, which merged the previous four slabs into two (5% and 18%), lowered effective rates on white goods and consumer durables, and discontinued the GST compensation cess, with only seven months of the revised structure captured in FY26 data.
The official said that once this base normalization is completed in FY27, tax buoyancy is expected to rise significantly in the subsequent years.
The senior official also stated that the focus area of the government in the budget was on providing tax certainty through specific safe harbors and treatment. The government announced a tax holiday for until 2047 for foreign companies providing global cloud services through data centres located in India and several other measures to provide tax certainty.
Source from: https://www.financialexpress.com/business/news/govt-open-to-demand-for-customs-amnesty-scheme-official/4130251/
