As Finance Minister Nirmala Sitharaman is to present the Union Budget for 2026-27 in Parliament on February 1, industry stakeholders and tax experts are expecting significant reforms in the customs procedures, particularly the simplification of the Special Valuation Branch (SVB) process.
Calls for Post-Clearance Audits
The SVB, a specialized unit under the Central Board of Indirect Taxes and Customs (CBIC), handles valuation of imported goods in transactions involving related parties, such as multinational companies importing from overseas group entities. This ensures that declared values reflect fair market prices, preventing undervaluation and revenue leakage. However, the current process is often not appreciated for being resource-intensive, time-consuming, and prone to delays, leading to prolonged assessments and disputes.
According to Harpreet Singh, Partner for Indirect Tax at Deloitte, the completion of SVB assessment is time consuming. He explained that for goods imported from related parties, a specific procedure under customs law requires detailed assessment through SVB channels. “The request is to streamline the process and make it much simpler,” Singh said, highlighting a key demand from industry players.
Tax partners at Deloitte have noted that there have been requests to reduce customs duty slabs from the current eight to three or four, alongside SVB simplification. The experts are also expecting the budget to focus towards full digitisation of appeals filing and litigation processes in customs. According to reports, over 75000 customs cases pending as on December 2024 with arrears exceeding Rs 24000 crore.
The push for these reforms gained momentum after Finance Minister Sitharaman, in December 2025, declared customs simplification as the government’s “next big reform agenda.” Speaking at an event, she emphasized the need for a comprehensive overhaul, stating, “We need to have customs simplified for people to feel that it is not cumbersome to comply… I need to make it more transparent.” Another round of Customs tariff cuts are also expected, which will bring the average applied tariffs down further.
This follows recent reforms in income tax and Goods and Services Tax (GST) aimed at boosting consumption and ease of doing business.
Digital Litigation
Industry bodies have also demanded an amnesty scheme for customs and excise disputes, with over Rs 1.52 lakh crore locked in pending litigation as of March 2024. Such a scheme could allow settlement by paying principal duties while waiving interest and penalties in non-wilful cases, providing relief to businesses and clearing backlogs.
Stakeholders remain optimistic that these long-standing demands would find a place in Sitharaman’s upcoming Budget presentation.