Calling for a shift from a “dispute-driven” to “dispute-preventive” tax system, the Confederation of Indian Industry (CII) has proposed fast-tracking all high-demand cases above Rs 100 crore and reviving the Authority for Advance Rulings as part of its pre-Budget 2026-27 recommendations.
In its detailed submission to the Revenue Secretary Arvind Shrivastava, CII urged the government to make India’s tax system “principle-based, technology-enabled, and trust-anchored” to support the country’s goal of becoming a developed economy under the Viksit Bharat 2047 vision. “The next stage of reform must ensure that taxation not only raises revenue efficiently but also acts as a catalyst for investment, innovation and competitiveness. The Budget can be a pivot for a truly modern, transparent and globally benchmarked tax regime,” the Director General of CII said.
CII noted that more than five lakh appeals are pending before Commissioners (Appeals), involving nearly Rs 18 lakh crore of disputed demand. It has therefore suggested that all high-demand cases above Rs 100 crore be resolved within a year through multiple virtual hearings under close monitoring by the Central Board of Direct Taxes (CBDT).
The industry body also recommended the revival of the Authority for Advance Rulings (AAR) as an independent, quasi-judicial body headed by retired High Court judges, empowered to deliver binding rulings within six months. CII said that the reconstituted AAR should also allow joint applications from industry associations to provide sector-wide clarity.
Taxpayers’ charter
To institutionalise taxpayer trust, CII has proposed that the existing taxpayer charter be elevated into a statutory taxpayer rights charter, legally guaranteeing time-bound refunds, faceless assessments and appeals, and accountability for administrative delays. Such a framework, the industry body said, would signal fairness and transparency while reinforcing voluntary compliance.
TDS regime
Highlighting the need for simplicity in direct taxation, CII said that India’s tax deducted at source (TDS) and tax collected at source (TCS) framework – with more than 35 categories and rates ranging from 0.1 percent to 30 percent – has become overly complex. The industry body has therefore proposed reducing the TDS categories to two or three broad groups, exempting transactions between GST-registered entities since these are already captured digitally.
Paper-free customs
CII proposed a phased roadmap towards paper-free customs by 2028, encompassing e-refunds, e-adjudication, and e-appeals. The industry body recommended that all customs clearance systems be fully digitalised through API-based data exchange to ensure seamless and transparent processing.
The industry body further proposed a single consolidated appeal against multiple bills of entry involving common issues, along with the automatic release of bonds and guarantees once export obligations are fulfilled.
Decriminalisation
CII also called for the removal of minor non-wilful offences from prosecution provisions in both direct and indirect tax laws. It recommended rationalising compounding thresholds and treating small procedural defaults as civil rather than criminal matters.
CII said that the overarching principle guiding India’s tax reforms must be to “simplify, stabilise, and digitise.” “Tax simplification is not a concession; it is an investment in governance efficiency. When rules are clear and systems are digital, compliance becomes automatic and disputes become exceptional,” he said.
He added that CII’s recommendations are “not about cutting taxes, but about cutting friction.” “By ensuring predictability, speed, and respect for the taxpayer, the government can reinforce India’s position as a high-growth, rule-based economy and make tax policy a true driver of Viksit Bharat 2047,” he said.
