Industry body FICCI has outlined a detailed set of expectations from the Union Budget 2026-27, focusing on faster dispute resolution, simpler tax compliance, clarity for global manufacturers, and smoother trade processes.
Direct Tax: Focus on faster appeals and liquidity
FICCI has raised concerns over the massive pendency of appeals before Commissioners of Income Tax (Appeals). Over 5.4 lakh cases involving disputed tax of about Rs. 18.16 lakh crore remain unresolved. It wants the government to urgently fill vacancies, introduce fast-track and complex-case tracks, fix timelines for remand reports, and allow refunds where appeals are delayed beyond two years without taxpayer fault.
It has also asked for a more practical stay-of-demand framework. Despite existing rules, taxpayers are often forced to pay 20% of disputed tax and still face refund adjustments by CPC. FICCI suggests real-time integration of stay orders with CPC systems and allowing alternatives like bank guarantees instead of cash deposits.
Business restructuring and global manufacturing
On corporate restructuring, FICCI wants fast-track demergers under the Companies Act to be made tax-neutral, similar to regular demergers. Without this clarity, companies may avoid using the fast-track route, defeating its purpose of reducing NCLT burden.
To support contract manufacturing and “Make in India”, FICCI has sought clarity that storage of components, just-in-time inventory, or deployment of free equipment by foreign OEMs should not create a taxable business connection in India. This, it says, will encourage global companies to bring advanced technology and efficient supply chains.
Simpler TDS and transfer pricing clarity
With over 37 different TDS rates, FICCI has called for rationalisation into a few standard rates, exemption for GST-linked B2B payments, and a clear negative list. It has also urged restoration of the old definition of Associated Enterprise to avoid fresh transfer pricing disputes under the new Income Tax Act.
Buyback taxation
FICCI has flagged anomalies in the new buyback tax regime, especially where buybacks are funded from share premium or fresh issue proceeds. It wants such transactions to be treated more like capital reduction, not deemed dividend.
Indirect tax and customs
On the customs side, FICCI has asked for more Advance Ruling offices beyond Delhi and Mumbai, easier extension of rulings, and allowing AEO benefits to new group companies. It has also suggested a centralised, real-time database for all Customs trade notices to improve transparency for importers and exporters.
