GLANCE AT THE UNION BUDGET 2026-27

By

The team of SANKHLA LAW ASSOCIATES

ADV. RAM CHANDER SANKHLA,

Former Chief Commissioner, Customs & GST

 

ADV. C. DHANASEKARAN,

FORMER PRINCIPAL COMMISSIONER, CUSTOMS & GST

ADV. INDU PALIWAL

ADV. RAHUL SANKHLA

www.rrsla.com

  1. The Union Budget 2026-27, presented by Finance Minister Nirmala Sitharaman, is the first budget prepared in the newly named Kartavya Bhawan. It is built upon three core duties (Kartavyas): accelerating economic growth, fulfilling citizen aspirations, and ensuring inclusive development (“Sabka Sath, Sabka Vikas”).

Customs Act, 1962: –

  1. Extension of the Customs Act, 1962 to fishing activities in international waters.
  2. The period of the binding effect of an advance ruling under the Customs Act, 1962 is proposed to be increased from the current three (3) years to five (5) years.
  3. Movement of Goods from one bonded warehouse to another: The existing requirement of prior permission of the proper officer of customs to move goods from one customs bonded warehouse to another is proposed to be removed.
  4. Duty deferral for certain Authorised Economic Operators (AEOs) is increased from 15 to 30 days.
  5. Introduction of Baggage Rules, 2026:
    • With effect 2 February 2026, new Baggage Rules has been introduced to rationalise baggage provisions
    • General baggage allowance has been increased from INR 50 thousand to INR 75 thousand.
    • Used personal effects” required for satisfying “daily necessities of life and travel souvenirs”, carried on the person or in his bona fide baggage would be allowed duty free clearance without any value limit.
    • Exclusion: firearms, cartridges of firearms exceeding 50 numbers, cigarettes exceeding 100 sticks, cigars exceeding 25 pieces, tobacco exceeding 125gms, alcoholic liquor or wines in excess of two litres, gold or silver in any form other than ornaments and television.
    • All passengers will continue to enjoy duty-free import of one new laptop (including notepad).
    • Indian residents, NRIs and OCIs living abroad for over a year can bring in duty-free jewellery up to 40 grams (female passengers) and 20 grams (others) in bona fide baggage.
    • Duty-free reimport of dutiable goods in bona-fide baggage by the Indian residents, NRIs and OCIs or a foreigner with a non-tourist visa will be allowed on the basis of export declaration made at the time of departure from India. Such declaration can now be made electronically at Atithi App. It also allows tourists to temporarily import articles for their stay subject to them being re-exported. Such passengers may be subjected to a risk-based verification.

 

GOODS AND SERVICE TAX

  1. Changes with respect to issuance of credit notes/discounts: The provision is being changed to make it simpler for the benefit of trade. Now, for the discounts extended subsequent to supply, the only requirement is that recipient of supply should reverse the ITC and the requirement of pre-existing agreements is done away with. [Amendment under Section 15(3)(b)].
  1. Change of place of supply with respect to intermediary services: The place of supply for intermediary services is being shifted from the supplier’s location to the recipient’s location by omitting Section 13(8)(b) of the IGST Act. As a result, Indian commission agents serving foreign suppliers will qualify as exporters of services and be eligible for export benefits, effective from Presidential assent.
  1. Extension of provisional refund to inverted duty also: Provisional refund of 90% is being extended to refund claims arising from an inverted duty structure through amendment to Section 54(6) of the CGST Act. This provision will take effect from a date to be notified by the Central Government in the Official Gazette.

 

SOURCE: UNION BUDGET 2026 and PIB.