Punita Bhuchar – [2026] 182 taxmann.com 650 (Article)
As India head into the Union Budget on 1st February 2026, it does so at the backdrop of a rapidly shifting global environment. Geopolitical conflicts, tariff-led trade disruptions, and climate-related risks continue to weigh on economies, even as discussions at forums such as Davos underline the speed at which Artificial Intelligence is reshaping industries worldwide. With yellow metal (24K Gold) touching record highs of around INR 1.5 lakh per 10 grams in India and global uncertainty remaining elevated, the budget is being framed against complex global and domestic realities that demand both stability and course correction.
A peek view of 2025 reveals a defining year for India’s growth wherein real GDP grew 8.2% in Q2 FY 2025-26, up from 7.8% in Q1 and 7.4% in Q4 of FY 2024-25, total exports of goods and services reached a record high of about US$825 billion. The GST rate changes and simplified tax structures in September 2025 have pre-witnessed one of the landmark steps towards effective taxable governance for CY 2026, so from indirect taxation perspective, the Budget 2026 encompasses scope for a next generation change from more of rate rationalization to more of administrative certainty and digital-first processes.
Tax Administrative Certainty
July 2025 marked the bronze anniversary of GST in India and was viewed positively across India Inc.- promoting ease of doing business, improving tax administration and supporting economic growth. This is not a mere statement, but one of the findings of survey conducted by Deloitte1 wherein 85 percent of respondents highlighted a positive experience in their eight-year GST journey. While the momentum got accelerated with the recent GST rates rationalization, a shift in gear is required towards enhancing the administrative certainty.
Administrative certainty is crucial pillar of any taxation framework that primarily focusses on clear and precise provisions, foreseeable outcomes, limited interpretations, less prone to disputes, and structured resolution processes. With 254 GST Circulars, numerous judicial pronouncements by various Hon’ble bodies and courts, certain vagueness still exist even on standard matters that necessitate clarity. To cite, eligible input tax credits are being rejected to the recipients on account of fault by suppliers in filing of returns, applications for refund of accumulated input tax credits against the export of services are being challenged and rejected on the basis that such services are classified as “intermediary” and not exports, despite existing clarifications issued by the government.
While GST regime in India may be largely stabilized, attention must now turn to Customs framework also, where impetus should be put on procedural simplification with the core objective of ease of doing business. A revamp to the Special Valuation Branch framework and an upgrade to AEO programme to a more predictable, risk-based model with faster timelines and clearer documentation is required. The validity of Customs Advance Rulings from 3 years to 5 years is required to provide longer-term predictability on classification/valuation/origin issues and reduce interpretational disputes across ports.
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