India Budget Rationalises Customs Tariff Rates to 8

New Delhi, Feb 1 (PTI) The government has rationalised basic customs duty rates, slashing the number of levies to just 8, but has kept the effective duty rates on most items the same by adjusting cess to further ease of doing business.

Finance Minister Nirmala Sitharaman removed seven tariff rates in the 2025-26 Budget. This is over and above the seven tariff rates removed in 2023-24 budget.

After this, there will be only eight remaining tariff rates, including 'zero' rate to further ease of doing business.

GTRI founder Ajay Srivastava said this count only considers Basic Customs Duty (BCD) with ad-valorem rates, ignoring the numerous specific and mixed rates that create hundreds of slabs.

"Additionally, part of the BCD was shifted to AIDC to reduce the official number of BCD slabs while keeping the total duty unchanged. Import duties also include AIDC, SWS (social welfare surcharge), and health cesses, meaning the actual number of slabs remains much higher than officially stated," Srivastava said.

Deloitte India Partner Harpreet Singh said the Budget proposes to merge four Customs Tariff Slabs of 25 per cent, 30 per cent, 35 per cent, and 40 per cent to 20 per cent, these generally cover products like soaps, plastics, chemicals, and footwear etc.

Similarly, 100 per cent, 125 per cent, and 150 per cent tariff rates, have been merged to 70 per cent, these typically cover laboratory chemicals and automobiles.

Deloitte India leader and partner, Indirect Tax, Mahesh Jaisingh said the effective rate has changed only in case of very few tariff items.

For the remainder, the difference in the reduced basic customs duty date has been compensated by imposing Agriculture Infrastructure Development Cess (AIDC), Jaisingh said.