Union Budget 2026–27: Customs Duty, Trade & Ease of Doing Business

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Union Budget 2026–27: Customs Duty, Trade & Ease of Doing Business

(Important Points for Exams – Simplified Notes)
By Home Academy

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1. FOB Value (Free on Board) – Exam Note

FOB value means the value of goods up to the point they are loaded on the ship.

It excludes freight and insurance charges.

FOB value is used to calculate:

Export incentives

Customs duty
Trade statistics
📌 MCQ Tip: FOB does not include transportation after shipment.

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2. Duty-Free Imports for Footwear Sector

Duty-free import of specified inputs for:

Leather footwear
Synthetic footwear
This benefit, earlier limited, will now be allowed for exports.

• 📌 Objective: Boost footwear exports and competitiveness.

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3. Energy Sector – Customs Duty Relief

Lithium-Ion & Solar Energy

Basic Customs Duty (BCD) exemption extended on:

Capital goods used for manufacturing Lithium-Ion cells.

BCD exempted on:

• Import of sodium antimonate used in manufacturing solar glass.

📌 Exam Focus: Supports renewable energy & battery manufacturing.

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4. Nuclear Energy & Consumer Appliances

BCD exemption on goods for Nuclear Power Projects:

Extended till 2035.

BCD exempted on specified parts used in:

Manufacturing microwave ovens.

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5. Critical Minerals & Biogas

BCD exempted on import of:

Capital goods for processing critical minerals.

For biogas blended CNG:

Entire value of biogas will be excluded while calculating Central Excise duty.

📌 Purpose: Encourage clean energy & strategic minerals.

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6. Civil & Defence Aviation Sector

BCD exempted on components and parts for:

Civilian aircraft
Training aircraft

BCD exempted on raw materials for:

Manufacture of aircraft parts used in maintenance, repair & overhaul (MRO) in Defence sector.

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7. Special Economic Zones (SEZs)

One-time special measure proposed:

Eligible SEZ manufacturing units can sell goods to Domestic Tariff Area (DTA) at concessional duty rates.

📌 Exam Angle: Improves SEZ viability.

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8. Ease of Living – Customs Relief

Tariff rate reduced:

From 20% to 10% on all dutiable goods imported for personal use.
BCD exempted on 17 drugs/medicines.

7 new rare diseases added:

Import of drugs, medicines & Food for Special Medical Purposes (FSMP) for treatment will be duty-free.

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9. Customs Processes – Faster & Smarter

Minimal customs intervention for faster movement of goods.

Duty deferral period increased:

From 15 days to 30 days for:

Tier-2 & Tier-3 Authorised Economic Operators (AEOs)
Eligible manufacturer-importers

Advance ruling validity extended:

From 3 years to 5 years
Government agencies encouraged to give priority clearance to AEOs.

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10. Warehousing Reforms

Customs warehousing to become:

Operator-centric

Based on:

Self-declaration
Electronic tracking
Risk-based audit

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11. Ease of Doing Business – Key Initiatives

Single digital window for cargo clearance approvals by end of FY.

Goods with no compliance requirement:

Cleared immediately after online registration.

Customs Integrated System (CIS):

To be rolled out in 2 years
Single platform for all customs processes.

Non-intrusive scanning using:

AI & advanced imaging
Goal: Scan every container at major ports.

12. Fisheries, Courier Exports & Travel

Fish caught by Indian vessels in:

Exclusive Economic Zone (EEZ) or High Seas → Duty-free

Landing fish at foreign ports:

Treated as export of goods

Courier exports value cap removed:

Earlier cap: ₹10 lakh per consignment
Benefits small businesses, artisans & startups.

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13. Baggage & Dispute Resolution

Baggage clearance rules to be revised:

Higher duty-free allowances for international travellers.

Dispute settlement:

Honest taxpayers can close cases by paying:

Tax + additional amount (instead of penalty).

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🔑 Quick Exam One-Liners

FOB value excludes freight & insurance.

BCD exemption for nuclear projects extended till 2035.
Duty deferral for AEOs increased to 30 days.
Advance ruling validity extended to 5 years.
Courier export cap of ₹10 lakh removed.
Tariff on personal imports reduced to 10%.