FICCI’s Key Expectations from Union Budget 2026-2027
Part A – Direct Tax
- Reduce pendency before CIT(A) and allow refund of taxes collected during pendency of appeal
Impact: – Reduction of pendency before CIT(A) is critical to success of new Faceless Appeal system, alleviate hardships faced by taxpayers by way of demands & blockage of refunds
CIT(A) is the first level of appeal after assessment order is received (except in cases where assessment order is passed pursuant to directions of Dispute Resolution Panel). Currently, there is a huge pendency of appeals filed before CIT(A). Around 5.4 lakh cases[1] are stuck with CIT(A) as on 1 April 2025 involving amount of Rs. 18.16 lakh crore[2].
The inventory buildup happened especially after faceless appeal regime was introduced in 2021 during Covid 19 to avoid physical interface with taxpayers. Due to faceless appeals mechanism, there does not seem to be adequate monitoring of its functioning. The non-familiarity with technology adds to the delays in disposal of cases. Even though the submissions and explanations are filed and are on portal, yet repeated notices are issued to the taxpayers on the same issue without looking into portal and without indicating any specific issue or further clarification required. Taxpayers are asked to repeatedly file submission but appeal is not disposed. In response to request for virtual hearing, no hearings are liberally granted, neither the matters are disposed. In cases where virtual hearing is granted, there are issues in presenting the documents to assist taxpayer in making his representations. Further, at present there is no time limit within which the AO is required to revert on the remand report. There is also no guidance under National Faceless Assessment Centre (NFAC) as to who should reply to the remand notice, jurisdictional AO or faceless unit.
The Government has taken some measures to reduce the pendency like appointing 100 new JCITs and rolling out second version of VSV settlement. Further, the Central Action Plan (CAP) for 2025-26 provides annual performance guidance for tax officers with targets based on point (assigned basis category of disposal – appeals/penalty order/remand reports etc.) and a minimum number of cases disposed. This does not differentiate basis value/ complexity/ age of issue. The CAP targets call for disposing of 2 lakh cases and Rs.10 lakh Cr of disputed demand for various charges (international tax and transfer pricing, central faceless and JCIT (appeals))[3]. Without capacity augmentation or differentiated tracks and timelines for disposal, it is infeasible to clear the backlog.
With quantum appeal pending, parallel penalty proceedings are also initiated and thus both quantum and penalty appeals pile up before CIT(A). The pre-Covid life cycle of litigation to reach Supreme Court of 12 to 15 years has now been further increased by 5 years. Pending litigation reflects as contingent liabilities in books of companies pulling down valuation of their shares during sale of shares by Indian promoters to FDI investors. Government also loses revenue due to high pendency of cases.
CIT(A) disposals have been largely on disputes relating to adjustments made in S. 143(1)(a) or small matters. It is recommended that CBDT should direct CIT(A) to dispose following cases on priority basis:-
- High pitched assessment/High tax Demand cases
- Cases where assessee has submitted its detailed written submission and while uploading the same has selected “Full response” on income tax portal
- Appeals against orders passed in scrutiny assessment under S. 143(3) (corresponding S. 270(10) of ITA 2025)
- Jurisdictional High Court/ Supreme Court ruling on the disputed issue even of other taxpayers
- Age of the appeal is 5 years or more from the date of filing the original appeal
- Old cases in chronological order (date wise)
It is recommended that 40% vacancies[4] at the level of CIT(A) should be immediately filled up with competent personnel through internal promotions/ transfers and/ or external recruitments. A dual-track system where (a) simple/ low-value cases are cleared in bulk through fast-track disposal, and (b) complex/high-value cases follow a detailed track with stricter scrutiny, with age-based prioritisation in-built for both should be introduced. There should be differentiated timelines and Central Action Plan (CAP) targets set for each track, alongside segregation for old and new cases.
The need for time-bound targets for CIT(A) disposal with differentiated targets for small vs. large-value cases may be re-emphasized. For instance, CBDT to qualitatively monitor monthly disposal target given to CIT(A) for example disposal of appeals of intimations that have already been processed by CPC and do not involve complex adjudication, appeals against rectification orders etc. A post-disposal sampling and review can be undertaken (similar to USA IRS’s Appeals Quality Measurement System) where a random sample of disposals is pulled each month and reviewed for quality standards, including timeliness of disposal, basis case parameters and complexity. A technical support unit to assist CIT(A)s and JCIT(A)s in complex legal and technical issues, especially in faceless appeals may be established.
The faceless assessment wing should be asked to dispose of the cases on regular basis so that they don’t have to rush when the statutory deadline is approaching. This will avoid high pitched assessment and unnecessary appeals.
Each CIT(A) should conduct two video conferencing. The first conferencing should be as early as possible (more to understand the major issues and walk through the details filed). The second hearing can be on detailed merits. This will give the CIT(A) better understanding and confidence in disposing the case. To expedite disposal by hearing matters over virtual hearings wherever demanded, system of Automatic Approval of Requests can be introduced where all virtual hearing requests to be granted within two weeks, conducted within four weeks, and monitored through a CBDT dashboard. Further, a system should be created where the Taxpayers can display documents/ evidence on real time basis during the virtual proceedings to support Taxpayers arguments. In order to safeguard against delays, where appeal disposal exceeds two years (without taxpayer fault), a mandatory stay on demand should apply, with refund of any amount already recovered.
Like in Faceless assessment, a draft of CIT(A) order should be sent to assessee (before final order) with an opportunity to assessee to submit its response to the same so that any prima facie factual error can be highlighted at that stage itself. Currently, in some cases CIT(A) have passed the orders with factual inaccuracy against which rectification application before CIT(A)/ appeal to ITAT has to be filed.
There has to be clear allocation of responsibility on the specific assessing officer (jurisdictional AO or faceless unit) to address remand report requisition of CIT(A). A time limit is to be specified within which AO should be mandated to revert on the remand order. This can be kept at withing 30 to 90 days. In case of failure to do so, the issued should be disposed off on merits by CIT(A). Also to ensure accountability and adherence of timelines by AO in responding to the remand order, all cases of non-compliance should be reported to the relevant superiors of AO. For companies where business is discontinued or are in liquidation, all pending appeals should mandatorily be disposed of within 4 – 8 weeks’ time from date of intimation to AO.
- Rationalise provisions to facilitate obtaining full stay of demand during pendency of appeals
Impact: – Rationalising stay of demand provisions will unlock amounts locked up in litigation, ease working capital blockage for taxpayers without adversely impacting Revenue’s interests
As per CBDT’s office memorandum dated 29th Feb 2016, the assessing officer shall grant the stay of demand till disposal of the first appeal on the payment of 15% of the disputed demand. The rate was subsequently increased prospectively to 20% vide circular dated 31st July 2017. It has been observed that in spite of the above office memorandum, Taxpayers are required to pay 20% of demand to seek stay even if issues are decided in taxpayer’s favour in earlier years. Subsequent years’ refunds are adjusted by Central Processing Centre (CPC) in routine manner against the pending demands even if stayed. This occurs because stay orders are not digitised or integrated with CPC databases. CPC systems lack real-time visibility of stayed demands, leading to automatic refund adjustments despite valid stay orders. Such adjustment defeats very purpose of statutory/judicial stay granted of demand.
It is recommended that a process/ functionality/ interface needs to be put in place which enables the assessing officer (AO) to update orders granting stay on tax demand to avoid administrative challenges and litigation as otherwise CPC adjusts the tax refunds without taking the cognizance of the stay order. Real-time synchronization between AO records and CPC’s processing module would ensure that stayed demands are automatically flagged and excluded from refund adjustments. Also, instead of insisting on payment of 20% of demand, alternative optional modes in appropriate circumstances should be allowed like provision of bank guarantee or indemnity to the tax department.
Alternatives for 20% pre-deposit can feel dilutive to revenue-protection but are only modernizing it, giving taxpayers flexibility while ensuring department has enforceable security. With safeguards like bank guarantee verification and automated expiry alerts, security risk is no higher than a cash pre-deposit. International benchmarks can be referenced where this is practiced. For example, Australia ATO recognizes that forcing taxpayers to make upfront cash deposits while their disputes are under appeal can create liquidity stress, especially for businesses and lead to inequitable treatment, since large corporates may manage deposits easily while smaller taxpayers’ struggle. To balance taxpayer liquidity with revenue protection, the ATO allows taxpayers to provide alternative forms of security (such as bank guarantees with specific conditions (irrevocable, unconditional, payable on demand), letters of credit, insurance bonds) instead of cash. This alternative is only provided after the ATO evaluates risk: size of tax in dispute, taxpayer’s financial position, likelihood of recovery etc. Bank guarantees must remain valid until final resolution and Taxpayers are responsible for renewing them if needed.
- Provide tax neutrality for fast-track demergers
(S.2(19AA) of ITA 1961 & s.2(35) of ITA 2025)
Impact: Providing clarity on tax neutrality of fast-track demergers will facilitate demergers in small size companies and intra-group restructuring in a smaller time frame, relieve burden on NCLT for processing such applications and thereby improve “ease of doing business” without adversely impacting Revenue’s interests
S.2(19AA) of ITA 1961 defines demerger with reference to s.391 to 394 of Cos Act 1956. S. 2(35) of ITA 2025 substitutes above reference to S.230 to 232 of Cos Act 2013. However, no reference is made to S.233 of Cos Act 2013. It may be noted that S.233 of Cos Act 2013 introduced the concept of fast-track merger/demerger for certain classes of companies without the need for NCLT approval. The salient features of this fast-track route is as follows-
- Scheme to be approved by Central Government after inviting objections from all Government departments and verifying no prejudice to public interest or creditors
- If Central Government not satisfied, scheme to be referred to NCLT for conventional approval process as per s.232
Earlier, it was applicable to mergers/demergers between small companies and holding-wholly owned subsidiaries. Recently, it was expanded to startup companies, holding & any subsidiary (not necessarily WOS) and unlisted companies (with borrowing < Rs. 50 Cr) with a view to improve “ease of doing business” for small sized companies and intra-group transactions.
Before Select Committee, stakeholders made representations for clarifying that fast track demerger will be tax neutral. The Ministry of Finance in the report of the Select Committee stated that the intention to provide tax neutrality to demerger was only to schemes approved by the court unlike fast-track demerger which is not under control and supervision of court. Since fast-track demergers are not court monitored, valuations thereof can result in tax implications or avoidance and hence absence of reference to S.233 of Cos Act 2013 in S.2(35) of ITA 2025 is not an inadvertent omission.
It is recommended that the Government should reconsider its views and include reference to s.233 of Cos Act 2013 in section 2(35) of ITA 2025 to provide tax neutrality to fast-track demergers. The objective of introducing fast track mergers & demergers by the Government was not to reduce the scope of regulatory scrutiny but to promote ease of doing business and declog the NCLT from matters involving small companies or intra-group transactions. The fast-track route only obviates NCLT approval and does not obviate compliance with other conditions for tax neutrality as also other approvals like shareholders, creditors, sector regulators and the Central Government. Revenue’s interests are also adequately safeguarded. GAAR can be invoked in exceptional circumstances of aggressive tax planning through fast-track demergers.
A fast-track demerger saves time of several months taken for obtaining NCLT approval in conventional demerger. It also relieves pressure on NCLT for processing routine and non-controversial demergers like intra-group or small demergers. If fast track demerger is not granted status of tax neutrality, no company will use fast track route for demerger which will defeat the Government’s intent of introducing fast track demerger to improve “ease of doing business”.
- Simplify compliance with respect to TDS
Impact: Simplification of the TDS rate structure will considerably ease the compliance burden on the taxpayers and avoid litigation due to characterisation disputes.
The continuous expansion of provisions of tax deduction at source on payments to residents have added to the compliance burden of the taxpayers. Under the Income Tax Act (‘the Act’), there is a wide variety of TDS provisions applicable to payments to residents with different rates and different thresholds. Currently, there are 37 different types of payments to residents where the TDS rates vary from 0.1% to 30%. (Refer, section 393(1)/(3) of ITA 2025). This gives rise to unwarranted disputes related to categorisation and interpretation. It also leads to cash flow blockage for the industry and interest cost for the government on refunds.
To further enhance the ease of doing business, the government should consider laying down a roadmap for rationalisation of TDS rate structure. The Government has made a good start to the simplification process by reducing the TDS rates on several payments from 5% to 2% through Finance (No.2) Act 2024.
Going forward, it is suggested that there be only three rate structures for TDS payments – TDS on salary at slab rate, TDS on lotteries/online games etc at maximum marginal rate and two standard rates for TDS for different categories. B2B payments which are subject to GST may be exempted from TDS considering that information relating to such transactions is captured in Form 26AS/AIS. TDS on such payments, more particularly TDS/TCS on purchase/sale of goods @ 0.1% do not result in significant collection of revenue but adds to compliance burden of industry. The standard revenue-neutral rates may be evaluated and worked out by the Revenue department based on data analytics. Besides, there should be a “negative list” of payments which will not be liable to TDS (like payments to senior citizens, exempt income payments (like payments to farmers), payments to banks and financial institutions, purchases from GST registered entities on which GST is paid etc.)
- Clarify non-trigger of business connection for Non-residents on storage of components or raw material storage in India for just-in-time supply to Indian contract/ deployment of free of cost asset or equipment in India
Impact: Exempting storage of components and equipment from creating a business connection would enable Foreign OEMs to deploy advanced machinery and efficient supply chains in India.
This would strengthen Indian contract manufacturing, improve competitiveness.
Despite the momentum of growth of manufacturing of mobiles in India, a significant tax policy challenge remains for such contract manufacturing arrangement. Under the current provisions of the Income-tax Act, 1961 (“1961 Act”) as also under newly enacted Income tax Act, 2025 (“2025 Act”), the deployment of any asset or equipment by a Foreign OEM at an Indian contract manufacturer’s facility although without any explicit consideration, carries exposure of creating a “business connection” in India for the Foreign OEM. This interpretation could expose the Foreign OEM to unintended tax liabilities and persistent litigation, even though its role is limited to providing assets for manufacturing purposes. The result is that many Foreign OEM remain hesitant to deploy their most advanced machinery and technology in India. Such hesitancy not only slows down the progress of Indian contract manufacturers but also puts India at a competitive disadvantage compared to manufacturing-driven economies such as Vietnam and China. The other alternative of contract manufacturer making investment in such machinery is not cost effective since it blocks significant capital and increases cost of manufacture in India.
Similarly, adoption of advanced supply chain models such just in time model involve highly synchronized and seamless integration between foreign OEMs, contract manufacturers, component vendors, storage providers among others. The process involves purchasing diverse types of components by the Foreign OEMs from vendors across the world and storing it at a Storage facility (owned or leased by a logistic service provider or the contract manufacturer) near the contract manufacturer’s production facility. When required, the Contract Manufacturer draws the inputs for production and the title to the inputs are simultaneously transferred from Foreign OEM to the contract manufacturer. Post the manufacturing process, the finished goods may be stored at the Storage facility while the title is transferred from contract manufacturer to the Foreign OEMs (either to the same entity that supplied the inputs or a different group entity). The Foreign OEMs can either export the finished goods or sell it in the domestic market.
In this regard, as the income tax law stands today, while there is a specific exclusion for activities confined to purchase of goods for the purpose of export, there is ambiguity whether the storage of inputs in India by Foreign OEMs for the purpose of manufacturing may result in creating a ‘business connection’ under section 9(1)(i) of the 1961 Act as also under section 9(9) of ITA 2025 and thereby, triggering income tax liability for Foreign OEMs in India on such storage activity. Also there may be a time gap between purchase and export, therefore clarity is required on whether purchase exclusion also applies to activity of storage of goods until they are exported.
It is true that most Double Taxation Avoidance Agreement (“DTAA”) entered into by India with other countries provide an exclusion with respect to creation of Permanent Establishment (“PE”) and corresponding attribution of business income in India for storage of inputs for the purpose of processing. An example in this regard is para 3(c) to Article 5 of the India-USA DTAA. But claiming treaty benefit involves additional compliance burden like furnishing Tax Residency Certificate, filing returns, transfer pricing compliance, Nil withholding certificate if insisted by the payer, etc which leaves scope for unintended tax litigations. This deters Foreign OEMs from deploying efficient supply chain models in India.
Having regard to the above, the Indian contract manufacturers directly import the inputs from various countries for use in production. This process has a long lead time, involves blockage of working capital for contract manufacturer leading to inefficiencies in the production process, and uncertain transportation costs.
The Hon’ble Finance Minister in her Budget speech for 2025-26 proposed to introduce a safe harbor tax certainty for non-residents who store components for supply to specified electronic manufacturing units. However, this is yet to be implemented.
Recommendation
- It is suggested to amend section 9 to provided that (i) storage of raw materials or components in India and its delivery by the non-resident for use in the manufacturing process by a contract
- in India for the purpose of export (iii) ownership of asset or equipment used by contract manufacturer in India in its manufacturing process shall not result in a business connection or in income accruing or arising in India to the non-resident owner of the raw materials/components/ good, assets or equipment in India.
- Restore Associated Enterprise (AE) definition in new Act as per old Act
(S. 92A of ITA 1961; S 162 of ITA 2025)
Impact: – Restoring AE definition in the new Act as per definition in the existing Act will preserve continuity of tax policy as recommended by Select Committee; provide certainty on TP compliance for taxpayers and avoid unwarranted litigation on coverage of AEs
S.92A of ITA 1961 provides for criteria to determine AE relationship between two related parties. In this regard, AE is defined in two parts. The first part [S. 92A(1)] defines the broad contours of the term and is based on participation in “management” or “control” or “capital”. The second part [S. 92A(2)] lists certain conditions which if satisfied would result in a deemed AE relationship. The second part begins with the phrase “for the purposes of sub-section (1)”.
The judiciary is currently divided on the interplay of Sections (S.) 92A(1) and 92A(2) in light of the scope of the phrase “for the purposes of sub-section (1)”. Certain courts have taken a view that the conditions specified in S. 92A(2) have to be satisfied for two enterprises to qualify as AEs. Similarly, there are also rulings which seem to have taken a view that S.92A(1) can apply independent of S. 92A(2).
In S.162 of the ITB 2025, it was proposed to replace the phrase “for the purposes of sub-section (1)” with the phrase “without affecting the generality of the provisions of sub-section (1)”. However, stakeholders represented that the change may expand the scope of AE and make the two parts mutually exclusive. Considering the views of the stakeholders, the Parliamentary Select Committee recommended to retain the original language as contained in existing S. 92A of ITA.
However, in the finally enacted ITA 2025, the provision does not make any reference to either of the two aforementioned phrases. Instead, the structure of the provision is modified such that the condition of participation in management, control or capital is made inapplicable for certain transactional relationships (e.g. loans, guarantees, provision of IPR for manufacturing, supplying 90% of raw material, etc.)
It is apprehended that the manner in which s.162 of ITA 2025 is worded, may raise various interpretational issues which may give rise to fresh litigation. For instance, the new provision makes an unrelated lender lending more than 51% of book value of assets of borrower, a deemed AE of the borrower requiring TP compliance by both borrower and lender despite being commercially unrelated and having no control over each other. As another illustration, it also makes unrelated Indian contract manufacturers AEs of foreign lead brand owners.
Therefore, it is suggested to restore the original definition of AE as mentioned in ITA 1961 so as to avoid any further ambiguity and preserve policy continuity with ITA 1961 being avowed object of new ITA 2025.
- Treat taxation of share buybacks at par with taxation of capital reduction at least for buybacks made out of share premium or fresh issue of shares
(Section 2(22)(f) of ITA 1961 and s.2(40)(f) of ITA 2025)
Impact: – Rationalisation of provisions of buy-back as deemed dividend would remove anomalies and bring fairness
Finance (No. 2) Act, 2024 has abolished buy-back tax (BBT) in the hands of the companies. Post amendment, whole of the consideration from ‘buy-back’ is deemed as dividend in the hands of the shareholder. No deduction is allowed against consideration from buy-back of shares which is deemed as dividend income. Further, the consideration for buyback is deemed to be NIL for the purposes of section 46A of ITA 1961 (s.69 of ITA 2025) such that the cost of acquisition of shares is considered as capital loss for the shareholders to be set off against other capital gains income either in the current year or future years.
From Explanatory Memorandum, it appears the above taxation regime is designed on the presumption that buyback always involves distribution of profits to the shareholders. It is submitted that such presumption needs a relook.
Section 68 of Companies Act 2013 permits buyback out of (a) retained earnings or (b) share premium or (c) proceeds of issue of another type of shares or securities. Hence, where a buyback is actually made out of share premium or proceeds of issue of another type of shares/securities, the new regime will lead to artificial taxation of capital receipt as dividend income.
Illustratively, if a loss making company utilises its share premium to buyback shares with face value/cost of Rs. 10 at Rs. 2 each, the shareholder will face dividend taxation on Rs. 2 despite there being no distribution of profits. It is hence submitted that the design of buyback taxation is anomalous and leads to taxation of notional dividend income despite shareholder incurring losses.
Internationally, buyback is treated as dividend only to the extent of distribution of profit and not for the capital component. For instance, in Australia, UK and Netherlands, the buyback is treated as dividend only to the extent of “income” component embedded in the buyback proceeds. Hence, the new regime treatment of buybacks as dividend-cum-capital loss should not be applied to buyback out of share premium or buyback out of proceeds of another issue of shares/security i.e., where retained earnings/accumulated profits are not distributed to the shareholders.
On the same principles, even in case of buyback out of retained earnings, the buyback consideration representing issue price of shares should not be treated as dividend income. The mechanism presently provided in Rule 40BB to determine the “amount received” by the company to be reduced from buyback proceeds under buy-back tax regime can be applied even under new regime for determining issue price of shares which is not to be treated as dividend.
Without prejudice to the above, it may be clarified that once the buyback consideration is fictionally deemed to be NIL for the purposes of section 46A of ITA 1961 (s.69 of ITA 2025), the anti-abuse provisions of section 50CA or section 50D (S.79 and 80 of ITA 2025) are not applicable.
Furthermore, to avoid any confusion or misinterpretation by the field authorities, the treatment of buyback under Double Tax Avoidance Agreements (DTAAs) as dividend income to the extent of amount treated as dividend under domestic law should be clarified by CBDT through a Circular, in the light of definition of Dividend in different treaties entered into by India.
Part B – Indirect Tax – Customs
- Constitute more offices of the Customs Authority for Advance Rulings (AAR)
Impact: Expanding Customs AAR offices and allowing self-declared extensions would enhance trade certainty and reduce compliance burden and lower litigation on customs matters.
The Customs Authority for Advance Rulings (CAAR) is a legal provision under section 28E of the Customs Act, 1962, that enables clarity and certainty to the taxpayers by addressing doubts and concerns regarding the classification of goods, determination of customs valuation, and other related issues. Since the revamp of the CAAR post Finance Act of 2018, the CAAR has played a crucial role in promoting transparency, reducing uncertainty, and fostering compliance with customs regulations by offering clear guidance to importers, exporters, and other stakeholders involved in cross-border trade.
However, at present the offices of the CAAR are established only at locations, New Delhi and Mumbai, with all-India jurisdictional division between them. This is despite a considerable number of applications being made by trade involved in ports in south and east of the country, such as Chennai, Hyderabad, Kolkata, etc.
It is accordingly requested that the Government may consider establishment of at least two more offices of the Authority to cover South and East of India. This measure will go a long way in bringing certainty to the trade and reducing litigations on Customs matters.
Further, in terms of Section 28J(2) of the Customs Act, 1962, an advance Ruling is valid for three years unless there is a change in the underlying law or facts. However, clarification/ guidance is not provided for cases where there is no change of law or facts, and the applicant seek an extension of the validity of the ruling.
It is accordingly requested that a mechanism/process be considered for extension of the validity of the rulings, on self-declaration basis (as is done in case of AEO Tier 1 or SVB Circular 4/2016- Customs dated 9 February 2016) so that the hassle of re-applying for a ruling despite no change in facts or law can be avoided.
- Allow benefit of AEO certification to newly incorporated companies of AEO accredited groups
Impact: Granting AEO status to new or restructured group companies would cut compliance delays, enhance trade facilitation and enable Customs officials to focus on high-risk taxpayers.
Presently, newly incorporated companies are not able to apply for AEO license, as two of the conditions for grant of AEO licencing is that the Company should be existence for more than three years and the applicant has to prove the financial solvency by submitting the audited balance sheet, compliance certificate for filing of annual account with register of Company and solvency declaration form for last three FYs.
Consequently, the said requirement poses challenges in grant of AEO licence even for new companies formed by established Group Companies.
Recommendations
- Multinational companies or companies which have been certified as AEO or any equivalent program in any other country, should be allowed to apply for AEO. AEO certification in other countries demonstrate awareness and accountability which can be trusted subject to usual checks and balances.
- For Indian origin company/ group Companies – if any other group company has been certified as AEO, in such case new company should also be allowed to file the application subject to usual checks and balance at the time of granting the AEO certification.
- Considering the growing M&A activity and Corporate Restructuring in India, there are multiple cases where one entity takes over another entity (merger of entities having AEO Tier 2 certification). It is suggested that in case both such entities are already enjoying AEO Tier 2 Status, the said status should be continued based on an intimation rather than requiring re-application.
Impact: Centralizing Trade Notices in a real-time web database would enhance transparency and streamline access for importers and exporters.
Issue
Presently, various Trade Notices are being issued by various Customs Commissionerate to facilitate export and import process. These Trade Notices can be viewed through web site of respective Customs Commissionerate or at times importers/exporters had to personally visit Customs House for obtaining these trade notices.
This results into unnecessary procedural hassles and lacks assessment transparency.
Recommendation
It is suggested that issuance of these Trade Notices may be centralized and a common web-based database may be maintained which is made available to importers/exporters on a real-time basis.
This will bring greater assessment transparency & will also ensure that assessment practices across all Custom ports are uniform.
[1] CBDT Central Action Plan, 2025-26
[2] Ninth Report of Standing Committee on Finance (2024-2025) – Presented to Lok Sabha on March 19, 2025
[3] Central Action Plan 2025-26, CBDT
[4] Ninth Report of Standing Committee on Finance (2024-2025) – Presented to Lok Sabha on March 19, 2025
