‘India not tariff king; Customs not major rev source’
NEW DELHI: With the US import tariff hike looming large, India has said it is not a tariff king. In a recent interaction with TNIE, finance and revenue secretary Tuhin Kanta Pandey said with a ‘fairly comprehensive exercise’ to rationalise import duties, India can’t be termed as tariff king as US president Donald Trump had referred India in his election campaigns.
Pandey said out of 8,562 tariff lines, 6,500 are below 10%, 7,600 are below 15% and 8,400 tariff lines are below 20%. “There are 216 tariff lines currently that have 0% duty, we have changed it to 260 (in budget),” says Pandey, who was inducted to the revenue department 20 days before the budget from the Department of Investment and Public Asset Management (DIPAM).
“We want people to know that this is a comprehensive exercise and wherever some outliers were there, we have taken them off. We have removed rates of 125%, 150% and 100% under industrial goods. We have one rate at high level and that’s 70% on only very few items. We have removed 40%, 35%, 30% and 25% and brought them down to 20%,” he says responding to a question on possible measures taken by India to avoid any tariff action by the Trump administration in the US.
He says the government is not looking at Customs duty as a major source of revenue. “We have assumed a growth of 2% (in customs duty collection in FY26). That means it is less than inflation and much lower than nominal GDP growth rate of 10.1%,” says the revenue secretary. The government has estimated Rs 2.40 lakh crore from Customs duty in FY26, up from Rs 2.35 lakh crore revised estimate in FY25.
Pandey said despite a drastic cut in income tax rates, the government is confident of a 14.4% growth in collection. He says the government has moderated income tax collections.
“We saw a growth of over 20% in last three years (income tax). This year, we have assumed a 14% growth, which is a buoyancy of 1.4,” he says adding that the government expects taxpayers to avail voluntary compliances scheme and pay right taxes. He says the government collected Rs 8,000 more from 90 lakh taxpayers in current financial year by letting them file updated returns. He expects a similar trend in the current financial year.
Cabinet approves Income Tax Bill
New Delhi: The Cabinet on Friday approved the Income Tax Bill, which will be introduced in parliament next week. The bill is a major exercise in making the income tax rules simpler and comprehensible. “You can expect simplicity, consistency and direct speech. This law will be written differently.
What we are saying is that a law which has been amended over 4,000 times, and has a lot of redundant provisions, can have a simpler rules, which even a salaried taxpayer can read and figure out what are his tax liabilities,” says revenue secretary Tuhin Kanta Pandey, adding that worldwide there is a new way of writing laws which are more direct and clearer. He clarified that there are no surprises in terms of tax structure, which he says would not be different from what the finance minister has already announced.