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“Indirect Tax I Indirect Tax Litigation I Customs & FTP I Central Licensing I Arbitration I Advisory”

Dated: 03.02.2026

“Summary of Changes and Amendments under Customs Provisions in the Finance Bill, 2026”

The below short Article is a summarized synopsis of the major changes that has been made in the Indian Customs Law in the light of the Union Budget 2026 through the Finance Bill, 2026.

Extension of Jurisdiction

• Amendment to Section 1(2): The jurisdiction of the Customs Act is extended beyond the territorial waters of India to include fishing and fishing-related activities by Indian-flagged fishing vessels.

Definition of Indian-Flagged Fishing Vessel

• Insertion in Section 2: A new clause is added to define “Indian-flagged fishing vessel” as a vessel used for fishing in the seas and entitled to fly the flag of India.

Penalty for Non-Payment of Duty

• Amendment to Section 28(6): Penalty paid under sub-section (5) of Section 28, on determination under sub-section (6), will be deemed as a charge for non-payment of duty.

Validity of Advance Rulings

• Amendment to Section 28J(2):
  • The validity of advance rulings is extended from three years to five years or until there is a change in law or facts.
  • Advance rulings in force on the date of the President’s assent to the Finance Bill, 2026 can be extended for five years upon request by the applicant.

Special Provisions for Fishing Activities

• Insertion of Section 56A:
  • Fish harvested by Indian-flagged fishing vessels beyond territorial waters can be brought into India free of duty.
  • Fish landed at foreign ports will be treated as export of goods, subject to conditions specified by rules.
  • The Central Board of Indirect Taxes and Customs is empowered to make regulations for the form and manner of making entries for fish harvested, including declaration, custody, examination, assessment of duty, clearance, transit, or transshipment.

Removal of Goods Between Warehouses

• Substitution of Section 67:
  • The requirement for prior permission from the proper officer for removing warehoused goods from one warehouse to another is removed.
  • The owner of warehoused goods can now remove them between warehouses subject to prescribed conditions.

Custody of Goods by Post or Courier

• Amendment to Section 84(b):
  • The Central Board of Indirect Taxes and Customs is empowered to make regulations for the custody of goods imported or exported by post or courier.

Customs Tariff Amendments

• Amendments to the First Schedule of the Customs Tariff Act:
  • Second Schedule: Imposition of composite duty on certain goods.
  • Third Schedule: Revision of rates for certain tariff items effective from April 1, 2026.
  • Fourth Schedule: Creation of new tariff entries effective from May 1, 2026.
  • Fifth Schedule: Revision of rates for certain tariff items effective from May 1, 2026.

These amendments aim to streamline customs procedures, enhance regulatory clarity, and promote specific activities such as fishing and export while revising tariff rates for certain goods.

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Source: Union Budget 2026-2027, Finance Bill 2026

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