The Union Budget 2025-26 was presented in the lower house (Lok Sabha) of the Indian Parliament on 1 February 2025. Number of changes have been made or proposed in the Customs law – both legislative changes and changes related to rate of duty. A few important changes are highlighted below.
- Provisional assessment would be required to be finalized within 2 years (extendable by one year), subject to certain specified exclusions – Section 18 of Customs Act, 1962 proposed to be amended.
- Voluntary revision of entry post clearance of export/imported goods to be introduced, with certain exclusions – New Section 18A also provides for verification of revision by proper officer. Consequential changes have also been proposed in Sections 27 and 28.
- Settlement Commission shall cease to operate from 1 April 2025 and shall be substituted by an Interim Board for disposal of applications pending before the Settlement Commission as on 31 March 2025.
- Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022 amended to increase the time limit for fulfilling end use from the current six months to one year. Further, the importers will now have to file only a quarterly statement instead of a monthly statement.
- Changes in rates of customs duties – Few important changes are highlighted below. See LKS Customs Update No. 6 of 2025 here for a detailed analysis on customs duty rates.
* Social Welfare Surcharge removed on 82 tariff lines that are subject to a cess.
* 36 lifesaving drugs and medicines added to the list of medicines fully exempted from Basic Customs Duty (BCD).
* 6 lifesaving medicines added to the list attracting concessional customs duty of 5%.
* 37 more medicines along with 13 new patient assistance programmes added under programmes run by pharmaceutical companies.
* Cobalt powder and waste, the scrap of lithium-ion battery, Lead, Zinc and 12 more critical minerals fully exempted.
* Two more types of shuttle-less looms added to the list of fully exempted textile machinery.
* Interactive Flat Panel Display (IFPD) – BCD increased from 10% to 20% while reduced to 5% on Open Cell and other components.
* 35 additional capital goods for EV battery manufacturing have been exempted
* 28 additional capital goods for mobile phone battery manufacturing exempted
* Ship building – Exemption continued on raw materials, components, consumables or parts for the manufacture of ships
* Carrier Grade ethernet switches – BCD reduced from 20% to 10%
* 9 items added to the list of duty-free inputs for manufacture of handicraft goods for exports.
* Wet Blue leather fully exempted from BCD
* Crust leather exempted from export duty
* Frozen Fish Paste (Surimi) for manufacture and export of its analogue products; and fish hydrolysate for manufacture of fish and shrimp feeds – Customs duty reduced to 5%.