Budget 2026–27 proposals: CII demands new tax compact based on trust and technology
CII Director-General Chandrajit Banerjee said India’s next economic leap requires a principle-based, technology-enabled, and trust-anchored tax system. He emphasised that taxation should serve as a catalyst for investment, innovation, and competitiveness rather than a source of friction.
- Oct 31, 2025,
- Updated Oct 31, 2025 5:09 PM IST
The Confederation of Indian Industry (CII) has presented a bold roadmap for reforming India’s tax system, urging the government to build a new “compact of trust, simplicity, and technology” in the Union Budget 2026–27. The recommendations, discussed during a meeting with the Revenue Secretary, aim to create a modern, transparent, and globally benchmarked tax framework aligned with the Viksit Bharat 2047 vision.
CII Director-General Chandrajit Banerjee said India’s next economic leap requires a principle-based, technology-enabled, and trust-anchored tax system. He emphasised that taxation should serve as a catalyst for investment, innovation, and competitiveness rather than a source of friction.
Highlighting key pain points, CII noted that more than five lakh appeals involving nearly Rs 18 lakh crore remain pending before tax authorities. To address this, it proposed time-bound dispute resolution, especially for high-demand cases above Rs 100 crore, which should be fast-tracked within a year through virtual hearings and close monitoring by the CBDT. It also suggested reviving the Authority for Advance Rulings (AAR) as an independent quasi-judicial body to provide binding clarity within six months.
CII further recommended enacting a Statutory Taxpayer Rights Charter, guaranteeing time-bound refunds, faceless assessments, and accountability for delays — a move it said would strengthen trust and fairness in tax administration.
Another major recommendation was simplifying the TDS/TCS framework, which currently spans over 35 categories and rates. CII proposed trimming these to two or three broad slabs and exempting transactions between GST-registered entities, which are already digitally tracked. It also called for clarifications that no TDS should be applied on the GST component of payments.
On customs and indirect taxes, CII advocated a Paper-Free Customs ecosystem by 2028, with full digitalisation of refunds, adjudications, and appeals through API-based data exchange. The industry body also sought a one-time customs dispute resolution scheme and longer validity for advance rulings.
To promote predictability, CII urged a multi-year corporate tax roadmap, rationalised compounding thresholds, and the decriminalisation of minor procedural lapses. It argued that such reforms would enhance voluntary compliance without affecting revenue.
CII also called for consolidating multiple exemption notifications into simplified mega-notifications, streamlining tariff schedules, and enabling a single consolidated appeal for multiple Bills of Entry to reduce procedural complexity. These steps, it said, would significantly improve the ease of doing business and align India’s trade ecosystem with global value chains.
“Tax simplification is not a concession; it is an investment in governance efficiency,” said Banerjee. “CII’s proposals are not about cutting taxes, but about cutting friction.”
CII concluded that these measures — time-bound dispute resolution, a simplified TDS regime, digital customs, and a statutory taxpayers’ charter — could transform India’s fiscal environment into one that is transparent, efficient, and growth-driven, helping the country achieve its long-term aspiration of Viksit Bharat 2047.
The Confederation of Indian Industry (CII) has presented a bold roadmap for reforming India’s tax system, urging the government to build a new “compact of trust, simplicity, and technology” in the Union Budget 2026–27. The recommendations, discussed during a meeting with the Revenue Secretary, aim to create a modern, transparent, and globally benchmarked tax framework aligned with the Viksit Bharat 2047 vision.
CII Director-General Chandrajit Banerjee said India’s next economic leap requires a principle-based, technology-enabled, and trust-anchored tax system. He emphasised that taxation should serve as a catalyst for investment, innovation, and competitiveness rather than a source of friction.
Highlighting key pain points, CII noted that more than five lakh appeals involving nearly Rs 18 lakh crore remain pending before tax authorities. To address this, it proposed time-bound dispute resolution, especially for high-demand cases above Rs 100 crore, which should be fast-tracked within a year through virtual hearings and close monitoring by the CBDT. It also suggested reviving the Authority for Advance Rulings (AAR) as an independent quasi-judicial body to provide binding clarity within six months.
CII further recommended enacting a Statutory Taxpayer Rights Charter, guaranteeing time-bound refunds, faceless assessments, and accountability for delays — a move it said would strengthen trust and fairness in tax administration.
Another major recommendation was simplifying the TDS/TCS framework, which currently spans over 35 categories and rates. CII proposed trimming these to two or three broad slabs and exempting transactions between GST-registered entities, which are already digitally tracked. It also called for clarifications that no TDS should be applied on the GST component of payments.
On customs and indirect taxes, CII advocated a Paper-Free Customs ecosystem by 2028, with full digitalisation of refunds, adjudications, and appeals through API-based data exchange. The industry body also sought a one-time customs dispute resolution scheme and longer validity for advance rulings.
To promote predictability, CII urged a multi-year corporate tax roadmap, rationalised compounding thresholds, and the decriminalisation of minor procedural lapses. It argued that such reforms would enhance voluntary compliance without affecting revenue.
CII also called for consolidating multiple exemption notifications into simplified mega-notifications, streamlining tariff schedules, and enabling a single consolidated appeal for multiple Bills of Entry to reduce procedural complexity. These steps, it said, would significantly improve the ease of doing business and align India’s trade ecosystem with global value chains.
“Tax simplification is not a concession; it is an investment in governance efficiency,” said Banerjee. “CII’s proposals are not about cutting taxes, but about cutting friction.”
CII concluded that these measures — time-bound dispute resolution, a simplified TDS regime, digital customs, and a statutory taxpayers’ charter — could transform India’s fiscal environment into one that is transparent, efficient, and growth-driven, helping the country achieve its long-term aspiration of Viksit Bharat 2047.