ASSOCHAM seeks Customs amnesty scheme to settle ₹1.5 trillion disputes | Economy & Policy News

Industry body Associated Chambers of Commerce and Industry of India (ASSOCHAM) has called for a one-time Customs amnesty scheme in the Union Budget 2027-28 to resolve legacy disputes involving about ₹1.5 trillion, proposing a waiver of interest and penalties and a graded reduction in disputed duty based on the age and stage of litigation.

In its pre-Budget memorandum, the industry body has sought special priority for disputes involving countervailing duty (CVD) and special additional duty (SAD), which were levied on imports before the introduction of the goods and services tax (GST) in July 2017. CVD was intended to offset central excise duty on domestically manufactured goods, while SAD was imposed to counterbalance state-level taxes such as value-added tax (VAT) and sales tax, ensuring a level playing field for domestic manufacturers. Both levies were subsumed into the GST regime, but disputes relating to the pre-GST period continue to remain unresolved.

The proposed scheme aims to provide businesses with an opportunity to settle long-pending disputes, reduce litigation and unlock resources currently tied up in tax proceedings.

ASSOCHAM has also called for time-bound finalisation of provisional Customs assessments, including cases handled by the Special Valuation Branch (SVB), which scrutinises the valuation of imports between related entities to prevent undervaluation and potential duty evasion. It has proposed that provisional assessments be treated as final if the delay is not due to the importer.

On the direct tax front, the industry body has pitched for reintroducing a concessional tax regime for new manufacturing companies on the lines of the erstwhile Section 115BAB of the Income-tax Act, 1961. Introduced in 2019, the provision allowed eligible new domestic manufacturing companies to pay tax at a concessional rate of 15 per cent, subject to certain conditions. However, the benefit was available only to companies that began manufacturing by March 31, 2024. ASSOCHAM has called for bringing back the regime with relaxed eligibility conditions and a longer window to encourage fresh investments, generate employment and improve export competitiveness.

It has also sought rationalisation of long-term capital gains (LTCG) taxation on listed securities, proposing a reduction in the tax rate to 10 per cent for holdings exceeding one year but less than two years, and a nil or reduced rate of around 5 per cent for investments held for more than two years.

Alternatively, ASSOCHAM has proposed allowing investors to claim credit for securities transaction tax (STT) against their LTCG tax liability on long-term holdings.

To provide greater tax certainty, the industry body has recommended strengthening the Dispute Resolution Committee by raising its eligibility threshold from ₹10 lakh to ₹10 crore. It has also called for reforms in the Board for Advance Rulings to ensure time-bound and conclusive decisions.

Among other proposals, ASSOCHAM has sought tax incentives for research and development (R&D) undertaken jointly by industry and recognised academic institutions, accelerated depreciation benefits for data centre infrastructure and greater clarity on taxation of foreign companies procuring data centre services through Indian resellers.

The recommendations are aimed at reducing compliance costs, minimising tax litigation and creating a more predictable tax environment to attract domestic and foreign investments, the industry body said.