Union Budget 2026–27 introduces an extensive overhaul of Customs and Central Excise provisions aimed at tariff rationalisation, trade facilitation, and ease of living. A major reform is the absorption of numerous notification-based exemptions and concessional rates directly into the Customs Tariff from 1 May 2026, without altering effective duty incidence, thereby simplifying the tariff structure and reducing interpretational disputes. Customs duty changes focus on correcting duty inversion, supporting domestic manufacturing, clean energy, critical minerals, MSMEs, exports, and healthcare, while extending relief to consumers through reduced duty on personal-use imports and revamped baggage rules. Several exemptions are rationalised, some allowed to lapse, and new tariff lines are created for precise classification. Legislative amendments modernise customs law by expanding jurisdiction to offshore fishing, extending advance ruling validity, simplifying warehousing, and recognising high-seas fishing as export activity. On the excise side, tobacco NCCD rates are revised, blended CNG receives renewable-friendly relief, and higher duty on unblended diesel is deferred, reinforcing the green transition.
Key Highlights of Union Budget 2026-27 Changes under Customs and Central Excise
CHANGES IN CUSTOMS
The Finance Minister introduced the Finance Bill, 2026 in Lok Sabha today, 1st February 2026. Changes in Customs and Central Excise rates have been proposed through the Finance Bill, 2026.
To prescribe effective rates of duty, the following notifications are being issued which are effective from 1st/2nd February, 2026 unless specified otherwise:
| Duty | Notification/Circular Nos. | Description | Effective Date |
| Tariff | |||
| Customs Duty | No. 1/2026-Customs | Seeks to amend five notifications, in order to extend their validity for a further period of two years till 31st March 2028 and make amendments in notification No. 25/2002-Customs, dated the 1st March, 2002 and notification No. 36/2024-Customs, dated the 23rd July, 2024. | 2nd February, 2026 |
| No. 2/2026-Customs | Seeks to further amend notification No. 45/2025-Customs dated the 24th October, 2025 to notify Basic Customs Duty related changes. | ||
| No. 3/2026-Customs | Seeks to further amend notification No. 11/2018-Customs, dated the 2nd February, 2018 and notification No. 11/2021-Customs, dated the 1st February, 2021 to revise Social Welfare Surcharge (SWS) and Agricultural Infrastructure Development Cess (AIDC) applicable on certain items. | ||
| No. 4/2026-Customs | Seeks to amend Notification No. 26/2016-Customs dated 31.03.2016 in view of new Baggage Rules, 2026. | ||
| No. 5/2026-Customs | Seeks to rescind Notification No. 11/2004-Customs dated 08.01.2004 and Notification No. 27/2016-Customs dated 31.03.2016 in view of new Baggage Rules, 2026. | ||
| Central Excise | No. 1/2026-Central Excise | Seeks to prescribe effective rates of NCCD on chewing tobacco, jarda scented tobacco and other tobacco products. | 1st May, 2026 |
| No. 2/2026-Central Excise | Seeks to (i) exempt value of Biogas/ Compressed Biogas contained in blended CNG along with appropriate GST paid on it, from the value of such blended CNG for the purpose of calculation of Central Excise duty on such blended CNG and (ii) to defer implementation of levy of additional duty of Rs 2 per litre on unblended diesel till 31st March 2028 | 2nd February, 2026 | |
| No. 3/2026-Central Excise | Seeks to rescind notification No. 5/2023-Central Excise dated 1.2.2023 | ||
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Non -Tariff
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| Customs | No. 12/2026-Customs (NT) | Seeks to add a new class of eligible importers as ‘Eligible Manufacturer Importers’ under Section 47 of the Customs Act, 1962 for duty deferral facility. | 1st February, 2026 |
| No. 13/2026-Customs (NT) | Seeks to amend the Deferred Payment of Import Duty Regulations, 2016 to extend duty deferral facilities for trusted entities from 15 to 30 days. | ||
| No. 14/2026-Customs (NT) | Seeks to notify the Baggage Rules, 2026. | ||
| No. 15/2026-Customs (NT) | Seeks to notify the Customs Baggage (Declaration & Processing) Regulations, 2026. | ||
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Circulars
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| Customs | Circular No.02/2026-Customs | Clarification on the term RPA (Remote Pilot Aircraft) for military use | 1st February, 2026 |
| Circular No.03/2026-Customs | Extension of time period under Deferred Payment of Import Duty Rules, 2016 and addition of eligible manufacture importer in class of eligible importers to avail the facility. | ||
| Circular No.04/2026-Customs | Guidelines for uniform implementation of Baggage Rules, 2026. | ||
| Circular No.05/2026-Customs | Onboarding of CDSCO, WCCB, Textile Committee and MeitY on SWIFT 2.0 as Single Touch Point for Trade. | ||
| Circular No.06/2026-Customs | Automation of Customs processes in import and export. | ||
| Circular No.07/2026-Customs | Introduction of system-based e-Scheduling for examination of cargo and mandatory use of Body Worn Cameras (BWC) during examination of import cargo. | ||
This document summarises the changes made/proposed under the Customs and Excise – Section wise in a comparative manner for easy digest.
Highlights of Important Changes in Customs (Industry-wise)
The proposed changes relating to Customs aim to rationalize tariff structure and address duty inversion. These will also support domestic manufacturing and value addition, promote exports, facilitate trade and provide relief to common people.
1. Energy Transition & Green Technology Sector
(Solar, Batteries, Energy Storage, Nuclear, Biogas)
- Duty exemptions extended to capital goods used for manufacturing Lithium-Ion Cells for both batteries and Battery Energy Storage Systems (BESS), promoting domestic production of clean-energy components.
- Basic Customs Duty (BCD) on sodium antimonate used in manufacturing solar glass reduced to NIL, cutting module production cost.
- Duty-free import of goods for Nuclear Power Projects extended till 2035 and expanded to all nuclear plants irrespective of capacity, enabling long-term energy security.
- BCD exemptions granted on critical mineral processing capital goods, strengthening India’s strategic mineral value chain.
- For biogas-CNG blending, entire biogas value excluded while calculating excise duty, encouraging greener fuel alternatives.
2. Aviation & Defence Manufacturing Sector
(Civil, Training & Defence Aircraft / MRO)
- BCD exemption on components & parts used in manufacture of civilian, training, and other aircraft to promote domestic aircraft production.
- Raw materials for manufacturing aircraft parts for Defence MRO units also exempted, making India a competitive aerospace servicing hub.
3. Seafood & Marine Products Industry
- Duty-free import limit for inputs used in processing seafood for export raised from 1% to 3% of last year’s export FOB value — promoting export competitiveness.
- Fish catch harvested in EEZ or High Seas by Indian vessels made completely duty-free; fish landed at foreign ports treated as exports, opening new revenue avenues for Indian fishermen.
4. Leather, Footwear, Garments & Textile Export Sector
- Duty-free import facility of inputs for leather / synthetic footwear extended now to Shoe Uppers, strengthening MSME-driven leather clusters.
- Export period for leather, textile garments and footwear increased from 6 months to 1 year, easing export operations.
5. Consumer Electronics & Appliances
- BCD exemption on specific parts used in manufacturing microwave ovens, improving domestic value addition in consumer electronics.
6. Special Economic Zones (SEZ) Manufacturing Sector
- To address capacity underutilisation due to global trade disruptions, SEZ units permitted one-time concessional-duty sales to Domestic Tariff Area (DTA), limited to a prescribed proportion of their exports.
7. Pharmaceutical & Healthcare Sector
- BCD exempted on 17 critical drugs/medicines, especially for cancer treatment (e.g., Ribociclib, Venetoclax, Ipilimumab, etc.).
- Seven new rare diseases added under duty-free personal import scheme for medicines/FSMP, reducing treatment burden for patients.
8. Personal Use Imports & Ease of Living
- Tariff rate on all dutiable goods imported for personal use reduced from 20% to 10%, directly benefitting consumers.
- Baggage Rules revamped, improving clarity on temporary carriage and increasing duty-free allowances for travelers.
9. Critical Minerals, Metals, & Industrial Raw Materials
Multiple items saw tariff rationalisation (largely shifting rates into Tariff Schedule while keeping effective rates unchanged) to simplify structure and correct inversion:
- Duty reduced or rationalized on:
- Natural graphite, quartz, natural sands, strontium sulphate
- Lithium oxide/hydroxide, cobalt oxides/hydroxides, rare-earth metals, selenium, germanium oxides
- Phosphoric acid, gibberellic acid, ammonium nitrate
- Artificial graphite, polymers of vinyl chloride
These changes support electronics, metallurgy, renewable energy storage, battery manufacturing, and chemical industries.
10. Port Logistics, Warehousing & Trade Facilitation
- Customs Integrated System (CIS) to be rolled out within 2 years—a unified digital platform for all customs processes.
- Non-intrusive scanning using AI to be adopted across major ports, ensuring faster clearances.
- Single window clearance for approvals from agencies handling food, drugs, plant & animal products (70% of interdicted cargo).
- Export cargo via electronic sealing directly from factories to ships enabled.
- Customs warehousing to move to a warehouse-operator–centric system, reducing officer-dependence and delays.
11. MSME & Other Manufacturing Sectors
- For MSMEs:
- Tariff rate structure revised for umbrellas and parts to protect domestic producers.
- Eligible manufacturer-importers to get duty deferral like Tier-2/Tier-3 AEOs, encouraging compliance and lowering working capital blockage.
12. Courier, E-commerce & Small Exporters
- ₹10 lakh per-consignment value cap removed on courier exports, enabling MSMEs, artisans, and start-ups to access global markets easily.
Important changes in respect of Customs duty rates are as detailed below:
Basic Customs Duty (BCD) rates are being revised. The Chapter-specific applicable BCD rates are as follows:
| Chapters | Proposed changes in BCD rates |
| Chapter 1
[Live animals; animal products] |
Vide S. No. 1 of TABLE I of notification No. 45/2025-Customs dated 24th October, 2025, Nil BCD was prescribed on Animals and birds imported by zoo falling under this chapter. On review, this entry is being omitted with effect from (w.e.f.) 2nd February, 2026. [S. No. I (1) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. Consequently, these goods will attract a BCD rate of 30% w.e.f. 2nd February 2026. |
| Chapter 2
[Meat and edible meat offal]
|
The applicable BCD rate on Meat and edible offal of turkeys, frozen, falling under this chapter, which hitherto was prescribed through notification No. 45/2025- Customs dated 24th October, 2025 is being incorporated in the First Schedule w.e.f. from 1st May, 2026. Accordingly, the relevant exemption entry shall be omitted w.e.f. 1st May, 2026 [S. No. I (2) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. There is no change in the applicable rate of duty. For details, please refer to S. No. 1 of Table 1 in Annexure III. |
| Chapter 3
[Fish and crustaceans, molluscs and other aquatic invertebrates] |
The value limit of duty-free imports of specified goods imported for use in processing of sea food products for export is being increased from 1% to 3% of the FOB value of seafood products exported during the preceding financial year w.e.f. 2nd February, 2026. This exemption is being extended till 31st March, 2028. Condition No. 5 against S. No. 69 of TABLE I of notification No. 45/2025-Customs dated 24th October, 2025 is being amended accordingly [S. Nos. I (27) and II (a) of notification No. 02/2026-Customs dated 1st February, 2026 refers].
The applicable BCD rates on Frozen krill and Artemia falling under this chapter, which hitherto were prescribed through notification No. 45/2025-Customs dated 24th October, 2025 are being incorporated in the First Schedule w.e.f. 1st May, 2026. Accordingly, relevant exemption entries shall be omitted w.e.f. 1st May, 2026 [S. Nos. I (4) and I (5) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. There is no change in the applicable rate of duty. For details, please refer to S. Nos. 1 of Table 2 in Annexure III and S.No. 2 of Table I in Annexure III. |
| Chapter 4: No Change | |
| Chapter 5
[Products of animal origin, not elsewhere specified or included] |
The applicable BCD rate on Artemia cysts, falling under this chapter, which hitherto was prescribed through notification No. 45/2025-Customs dated 24th October, 2025 is being incorporated in the First Schedule w.e.f. from 1st May, 2026 [S. No. I (7) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. Accordingly, the relevant exemption entry shall be omitted w.e.f. 1st May, 2026. There is no change in the applicable rate of duty. For details, please refer to S. No. 3 of Table I in Annexure III. |
| Chapter 6-7: No Change | |
| Chapter 8
[Edible fruit and nuts; peel of citrus fruit or melons] |
The applicable BCD rates on Almonds (in shell), Almonds (shelled), Walnuts (in shell), Pecan nuts, Cranberries and Blueberries (fresh, frozen and dried) falling under this chapter, which hitherto were prescribed through notification No. 45/2025-Customs dated 24th October, 2025 are being incorporated in the First Schedule w.e.f. from 1st May, 2026. Accordingly, the relevant exemption entries shall be omitted w.e.f. 1st May, 2026 [S. Nos. I (9) to I (15) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. There is no change in the applicable rate of duty. For details, please refer to S. Nos. 4 to 6 of Table 1 and 2-8 of Table 2 in Annexure III. |
| Chapter 9-11: No Change | |
| Chapter 12
[Oil seeds and oleaginous fruits, miscellaneous grains, seeds and fruit; industrial or medicinal plants; straw and fodder] |
The applicable BCD rates on “Seeds, fruit and spores, of a kind used for sowing”, and shea nuts falling under this chapter, which hitherto were prescribed through notification No. 45/2025-Customs dated 24th October, 2025 are being incorporated in the First Schedule w.e.f. from 1st May, 2026. Accordingly, the relevant exemption entries shall be omitted w.e.f. 1st May, 2026 [S. Nos. I (16), I (17) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. There is no change in the applicable rate of duty. For details, please refer to S. No. 7 of Table 1 and S. No. 9 of Table 2 in Annexure III. |
| Chapter 13
[Lac; gums, resins and other vegetable saps and extracts] |
Tariff item 1302 19 19 to 1302 19 30 and their entries are being substituted to create nineteen new tariff items w.e.f. 1st May, 2026. [Clause 136(c)(i) read with Fourth Schedule of the Finance Bill, 2026, refers] |
| Chapter 14: No Change | |
| Chapter 15
[Animal or vegetable fats and oils and their cleavage products; prepared edible fats; animal or vegetable waxes] |
The applicable BCD rate on Wool grease and fatty substances derived therefrom (including lanolin), falling under this chapter, which hitherto was prescribed through notification No. 45/2025-Customs dated 24th October, 2025 is being incorporated in the First Schedule w.e.f. from 1st May, 2026. Accordingly, the relevant exemption entry shall be omitted w.e.f. 1st May, 2026 [S. No. I (18) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. There is no change in the applicable rate of duty. For details, please refer to S. Nos. 8 of Table I in Annexure III. |
| Chapter 16-19: No Change | |
| Chapter 20
[Preparations of vegetables, fruit, nuts or other parts of plants] |
The applicable BCD rate on Makhana, other roasted nuts and seeds, other nuts (otherwise prepared or preserved), and cranberries and blueberries (otherwise prepared or preserved), falling under this chapter, which hitherto were prescribed through notification No. 45/2025-Customs dated 24th October, 2025 are being incorporated in the First Schedule w.e.f. from 1st May, 2026. Accordingly, the relevant exemption entries shall be omitted w.e.f. 1st May, 2026 [S. Nos. I (21-24) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. There is no change in the applicable rate of duty. For details, please refer to S. No. 9-10 of Table 1 and S. No. 10-11 of Table 2 in Annexure III. |
| Chapter 21
[Miscellaneous edible preparations] |
The applicable BCD rate on All goods, other than specified compound alcoholic preparations, falling under sub-heading 2106 90, which hitherto was prescribed through notification No. 45/2025-Customs dated 24th October, 2025 is being incorporated in the First Schedule w.e.f. from 1st May, 2026. Accordingly, the relevant exemption entry shall be omitted w.e.f. 1st May, 2026 [S. Nos. I (25) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. There is no change in the applicable rate of duty. For details, please refer to S. No. 12 of Table 2 in Annexure III. Consequential amendments are also being made to the SWS exemption notification to carry out above changes [Sl. No. 1 of notification No. 03/2026-Customs refers]. |
| Chapter 22
[Beverages, spirits and vinegar] |
The applicable BCD rate on Cranberry products, which hitherto were prescribed through notification No. 45/2025-Customs dated 24th October, 2025 is being incorporated in the First Schedule w.e.f. 1st May, 2026. Accordingly, relevant exemption entry shall be omitted w.e.f. 1st May, 2026 [S. No. I (26) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. There is no change in the applicable rate of duty. For details, please refer to S. No. 13 of Table 2 in Annexure III. |
| Chapter 23
[Residues and waste from the food industries; prepared animal fodder] |
Vide notification No. 113/2003-Customs dated 22nd July, 2003, BCD was exempted on castor oil cake and castor de-oiled cake manufactured from indigenous castor oil seeds on indigenous plant and machinery by a unit in SEZ and brought to DTA. On review, this notification is being allowed to lapse w.e.f. 1st April, 2026. Consequently, these goods will attract BCD rate of 15% w.e.f. 1st April, 2026.
The applicable BCD rate on Prawn and shrimps feed, falling under this chapter, which hitherto was prescribed through notification No. 45/2025-Customs dated 24th October, 2025 is being incorporated in the First Schedule w.e.f. from 1st May, 2026. Accordingly, the relevant exemption entry shall be omitted w.e.f. 1st May, 2026 [S. No. I (28) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. There is no change in the applicable rate of duty. For details, please refer to S. No. 11 of Table 1 in Annexure III. |
| Chapter 24: No Change | |
| Chapter 25
[Salt; sulphur; earths and stone; plastering materials, lime and cement] |
The applicable BCD rate on Acid grade fluorspar, falling under this chapter, which hitherto were prescribed through notification No. 45/2025-Customs dated 24th October, 2025 is being incorporated in the First Schedule w.e.f. from 1st May, 2026. Accordingly, the relevant exemption entry shall be omitted w.e.f. 1st May, 2026 [S. No. I (29) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. There is no change in the applicable rate of duty. For details, please refer to S. No. 14 of Table 2 in Annexure III.
The applicable BCD rates on Natural graphite, Natural sands of all kinds (other than metal bearing sands), Quartz and quartzite, and Strontium sulphate (natural ore) falling under this chapter, which hitherto were prescribed through notification No. 36/2024-Customs dated 23rd July, 2024 are being incorporated in the First Schedule w.e.f. from 1st May, 2026. Accordingly, the relevant exemption entries shall be omitted w.e.f. 1st May, 2026. [S. No. 6 of notification No. 01/2026-Customs dated 1st February, 2026 refers]. There is no change in the applicable rate of duty. For details, please refer to S. Nos.12-15 of Table 1 in Annexure III. Consequential amendments are also being made to the SWS exemption notification to carry out above changes [S. No. 1 of notification No. 03/2026-Customs refers]. |
| Chapter 26
[Ores, slag and ash] |
BCD rate on Monazite, falling under tariff item 2612 20 00, is being decreased from 2.5% to Nil vide insertion of S. No. 84A in TABLE I of notification No. 45/2025- Customs dated 24th October, 2025 [S. No. I (31) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. This change is being made effective from 2nd February, 2026.
The applicable BCD rate on Hafnium ores and concentrates, falling under this chapter, which hitherto was prescribed through notification No. 36/2024-Customs dated 23rd July, 2024, is being incorporated in the First Schedule w.e.f. from 1st May, 2026. Accordingly, the relevant exemption entry shall be omitted w.e.f. 1st May, 2026. [S. No. 6 of notification No. 01/2026-Customs dated 1st February, 2026 refers]. There is no change in the applicable rate of duty. For details, please refer to S.No. 15 of Table II in Annexure III. |
| Chapter 27
[Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes] |
Vide S. No. 93 of TABLE I of notification No. 45/2025-Customs dated 24th October, 2025, Nil BCD is prescribed on Naphtha, for use in the manufacture of fertilizers, falling under heading 2710. On review, this entry is being allowed to lapse on 31st March, 2026 [S. No. I (35) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. Consequently, these goods will now attract applicable BCD rate w.e.f. 1st April, 2026.
Vide S. No. 95 of TABLE I of notification No. 45/2025-Customs dated 24th October, 2025, Nil BCD is prescribed on Liquefied Petroleum Gases (LPG), in excess of the quantity of petroleum gases and other gaseous hydrocarbons consumed in the manufacture of polyisobutylene by the unit located in Domestic Tariff Area (DTA), received from the unit located in Special Economic Zone (SEZ) and returned by the DTA unit to the SEZ unit from where such Liquefied petroleum gases (LPG) were received, falling under heading 2711. On review, this entry is being allowed to lapse on 31st March, 2026 [S. No. 36 of notification No. 02/2026-Customs dated 1st February, 2026 refers]. Consequently, these goods will now attract applicable BCD rate w.e.f. 1st April, 2026.
The applicable BCD rates on Coal, briquettes, ovoids, etc. and petroleum crude, falling under this chapter, which hitherto were prescribed through notification No. 45/2025-Customs dated 24th October, 2025 are being incorporated in the First Schedule w.e.f. from 1st May, 2026. Accordingly, the relevant exemption entries shall be omitted w.e.f. 1st May, 2026 [S. No. I (33-34) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. There is no change in the applicable rate of duty. For details, please refer to S. Nos. 16-17 of Table 1 in Annexure III. |
| Chapter 28
[Inorganic chemicals, organic or inorganic compounds of precious metals, of rare-earth metals, of radioactive elements or of isotopes] |
BCD rate on Potassium hydroxide, falling under tariff item 2815 20 00, is being increased from Nil to 7.5%, vide omission of S. No. 21 of notification No. 36/2024- Customs dated 23rd July, 2024 [S. No. 6 of notification No. 01/2026-Customs dated 1st February, 2026 refers]. This change will come into effect from 2nd February, 2026.
BCD rate on Sodium antimonate, falling under tariff item 2841 90 00, for use in manufacture of solar glass is being decreased from 7.5% to Nil vide insertion of S. No. 110A in TABLE I of notification No. 45/2025-Customs dated 24th October, 2025 [S. No. I (42) of notification No. 02/2026-Customs, dated 1st February, 2026 refers]. This change is being made effective from 2nd February, 2026. The BCD exemption on Salts of oxometallic or peroxometallic acids of Beryllium and Rhenium, falling under tariff item 2841 90 00, and compounds, inorganic or organic of rare earth metals falling under heading 2846, which hitherto were prescribed through notifications No. 36/2024-Customs dated 23rd July, 2024, is now being prescribed through the consolidated notification No. 45/2025-Customs dated 24th October, 2025 vide insertion of S. No. 110B and 111A in TABLE I, w.e.f. 2nd February, 2026 [S.No. I (42) and I (44) of notification No. 02/2026-Customs refers]. Accordingly, the relevant exemption entries in notification No. 36/2024-Customs shall be omitted w.e.f. 2nd February, 2026 [S.No. 6 of notification No. 01/2026-Customs refers]. There is no change in the applicable rate of duty. Vide S. No. 107 of TABLE I of notification No. 45/2025-Customs dated 24th October, 2025, Nil BCD is prescribed on Silicon in all forms for the manufacture of undiffused silicon wafers; and un-diffused silicon wafers for the manufacture of solar cells or solar cell modules, falling under Chapter 28 or 38. On review, this entry is being allowed to lapse on 31st March, 2026 [S. No. I (39) of notification No. 02/2026- Customs dated 1st February, 2026 refers]. The applicable BCD rate on Phosphoric acid and Ammonium metavanadate, falling under this chapter, which hitherto were prescribed through notification No. 45/2025-Customs dated 24th October, 2025 are being incorporated in the First Schedule w.e.f. from 1st May, 2026. Accordingly, the relevant exemption entries shall be omitted w.e.f. 1st May, 2026. [S. No. I (40-41) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. There is no change in the applicable rate of duty. The applicable BCD rates on Tellurium, Silicon, Silicon dioxide, Selenium, Rare-earth metals and other critical minerals falling under this chapter, which hitherto were prescribed through notification No. 36/2024-Customs dated 23rd July, 2024, are being incorporated in the First Schedule w.e.f. from 1st May, 2026. Accordingly, the relevant exemption entries shall be omitted w.e.f. 1st May, 2026. [S. No. I (21-22) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. There is no change in the applicable rate of duty. Consequential amendments are also being made to the SWS exemption notification to carry out above changes [Sl. No. 1 of notification No. 03/2026-Customs refers]. (For details of (5) and (6) above, please refer to S. Nos. 18-40 of Table 1 and S. No. 16 Table 2 in Annexure III.) |
| Chapter 29
[Organic chemicals] |
Vide S. No. 113 of TABLE I of notification No. 45/2025-Customs dated 24th October, 2025, concessional BCD rate of 5% was prescribed on Alpha pinene falling under this chapter. On review, this entry is being omitted w.e.f. 2nd February, 2026. [S. No. I (46) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. Consequently, these goods will attract applicable rate of BCD w.e.f. 2nd February, 2026.
Vide S. No. 117 of TABLE I of notification No. 45/2025-Customs dated 24th October, 2025, Nil BCD is prescribed on Maltol, for use in the manufacture of deferiprone, falling under this chapter. On review, this entry is being allowed to lapse on 31st March, 2026 [S. No. I (50) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. Consequently, these goods will now attract applicable BCD rate w.e.f. 1st April, 2026. Vide S. No. 134 of TABLE I ofnotification No. 45/2025-Customs dated 24th October, 2025, concessional BCD rate of Nil is prescribed on “Goods specified in List 8 appended to TABLE I of notification No. 45/2025-Customs dated 24th October, 2025 for use in the manufacture of EVA (Ethylene Vinyl Acetate) sheets or backsheet, which are used in the manufacture of solar photovoltaic cells or modules”. On review, this entry is being modified. The exemption now applies to ‘Goods specified in List 8 appended to TABLE I of notification No. 45/2025-Customs dated 24th October, 2025 for use in the manufacture of sheets/encapsulants of EVA (Ethylene Vinyl Acetate), PoE (Polyolefin Elastomer) or combinations thereof or backsheet, which are used in the manufacture of solar photovoltaic cells or modules ’ falling under CTH 2915, 2933, 3208, 3506, 3815 , 3901 or 3920 [S. No. I (57) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. This change is being made effective from 2nd February, 2026. The applicable BCD rate on Methyloxirane (propylene oxide), Gibberellic acid (heading 2932), Triethyl orthoformate, Diethyl malonate, DL-2 Aminobutanol, Aceto butyrolactone, Artemisinin and Thymidine falling under this chapter, which hitherto were prescribed through notification No. 45/2025-Customs dated 24th October, 2025 are being incorporated in the First Schedule w.e.f. from 1st May, 2026. Accordingly the relevant exemption entries shall be omitted w.e.f. 1st May, 2026. [S. No. I (48,49,51) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. There is no change in the applicable rate of duty. For details, please refer to S. No. 41 of Table 1 and S.Nos. 17-23 of Table 2 in Annexure III. The applicable BCD rate on Bismuth citrate falling under this chapter, which hitherto were prescribed through notification No. 36/2024-Customs dated 23rd July, 2024 is being incorporated in the First Schedule w.e.f. from 1st May, 2026. Accordingly, the relevant exemption entry shall be omitted w.e.f. 1st May, 2026. [S. No. 6 of notification No. 01/2026-Customs dated 1st February, 2026 refers]. There is no change in the applicable rate of duty. For details, please refer to S. No. 42 of Table 1 in Annexure III. In headings 2915, 2916, 2917, 2918, 2922, 2924, 2927, 2932, 2933, 2934 and 2939, various tariff items and their entries are being substituted to create thirty-six new tariff items along with 2 amendments w.e.f. 1st May, 2026. [Clause 136(c)(i) read with the Fourth Schedule of the Finance Bill, 2026, refers] |
| Chapter 30
[Pharmaceutical products] |
Exemption from BCD is being extended to 17 new drugs/medicines (as detailed below) by adding them to List 3 appended to TABLE I of notification No. 45/2025-Customs dated 24th October, 2025 [S. No. III (a) of notification No. 02/2026-Customs dated 1st February, 2026 refers].
Seven rare diseases (as detailed below) that are part of National Policy for Rare Diseases (NPRD) 2021 are being added to List 22 appended to TABLE I of notification No. 45/2025-Customs dated 24th October, 2025 for extending customs duty exemption on drugs, medicines and food for special medical purposes when imported for personal use.
This change will come into effect form 2nd February, 2026. [S. No. III (b) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. Vide S. No. 123 of TABLE I of notification No. 45/2025-Customs dated 24th October, 2025, concessional BCD rate of 5% was prescribed on Artificial plasma falling under this chapter. On review, this entry is being omitted w.e.f. 2nd February, 2026. [S. No. I (53) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. Consequently, these goods will attract applicable rate of BCD through the First Schedule. |
| Chapter 31
[Fertilisers] |
Vide S. No. 128 of TABLE I of notification No. 45/2025-Customs dated 24th October, 2025, concessional BCD rate of 5% was prescribed on Ammonium phosphate or ammonium nitro-phosphate, for use as manure or for the production of complex fertilisers falling under this chapter. On review, this entry is being omitted w.e.f. 2nd February, 2026. [S. No. I (55) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. Consequently, these goods will attract applicable rate of BCD through the First Schedule.
S. No. 132 of TABLE I of notification No. 45/2025-Customs dated 24th October, 2025 is being omitted w.ef. 2nd February, 2026, being redundant [S. No. I (56) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. The applicable BCD rate on Potassium sulphate, containing not more than 52% by weight of potassium oxide, falling under tariff item 3104 30 00, hitherto prescribed through this notification/ S.No. 132, shall continue vide the First Schedule. The applicable BCD rate on Ammonium nitrate, whether or not in aqueous solution, falling under this chapter, which hitherto were prescribed through notification No. 45/2025-Customs dated 24th October, 2025 is being incorporated in the First Schedule w.e.f. from 1st May, 2026. Accordingly, the relevant exemption entry shall be omitted w.e.f. 1st May, 2026 [S. No. I (54) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. There is no change in the applicable rate of duty. For details, please refer to S. Nos. 43 of Table 1 in Annexure III. |
| Chapter 32: No Change | |
| Chapter 33 [Essential oils and resinoids, perfumery, cosmetic or toilet preparations] | The applicable BCD rate on Mixtures of odoriferous substances of a kind used in food or drink industries other than specified compound alcoholic preparations, falling under this chapter, which hitherto was prescribed through notification No. 45/2025-Customs dated 24th October, 2025 is being incorporated in the First Schedule w.e.f. from 1st May, 2026. Accordingly, the relevant exemption entry shall be omitted w.e.f. 1st May, 2026 [S. No. I (58) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. There is no change in the applicable rate of duty. For details, please refer to S. No. 24 of Table 2 in Annexure III. |
| Chapter 34-37: No Change | |
| Chapter 38
[Miscellaneous chemical products] |
S. No. 137 of TABLE I of notification No. 45/2025-Customs dated 24th October, 2025 is being omitted w.e.f. 2nd February, 2026, being redundant [S. No. I (59) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. The applicable BCD rate on Other diagnostic or laboratory reagents, falling under tariff item 3822 90 90, hitherto prescribed through this notification/S.No. 137, shall continue vide the First Schedule.
Vide S. No. 236 of TABLE I of notification No. 45/2025-Customs dated 24th October, 2025 concessional BCD rate of 5% is prescribed on Zeolite for use in the manufacture of washcoat for catalytic converters, falling under tariff item 3824 99 00. On review, this entry is being allowed to lapse on 31st March, 2026 [S. No. I (123) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. Consequently, these goods will now attract applicable BCD rate w.e.f. 1st April, 2026. The applicable BCD rates on Gibberellic acid (heading 3808), falling under this chapter, which hitherto were prescribed through notification No. 45/2025-Customs dated 24th October, 2025 is being incorporated in the First Schedule w.e.f. from 1st May, 2026. Accordingly, the relevant exemption entry shall be omitted w.e.f. 1st May, 2026 [S. No. I (48) of notification No. 02/2026-Customs dated 1st February, 2026refers]. There is no change in the applicable rate of duty. For details, please refer to S. No. 45 of Table 1 in Annexure III. The applicable BCD rates on Artificial graphite, colloidal or semi-colloidal graphite, preparations based on graphite or other carbon in form of pastes, blocks, plates or other semi-manufactures falling under this chapter, which hitherto were prescribed through notification No. 36/2024-Customs dated 23rd July, 2024, is being incorporated in the First Schedule w.e.f. from 1st May, 2026. Accordingly, the relevant exemption entry shall be omitted w.e.f. 1st May, 2026 [S. No. 6 of notification No. 01/2026-Customs dated 1st February, 2026 refers]. There is no change in the applicable rate of duty. For details, please refer to S. No. 44 of Table 1 in Annexure III. Consequential amendments are also being made to the SWS exemption notification to carry out above changes [S. No. 1 of notification No. 03/2026-Customs refers]. |
| Chapter 39
[Plastic and articles thereof] |
S. No. 139 of TABLE I of notification No. 45/2025-Customs dated 24th October, 2025 is being omitted w.e f. 2nd February, 2026, being redundant [S. No. I (61) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. The applicable BCD rate on Ethylene Vinyl Acetate (EVA), hitherto prescribed through this notification/S.No. 139, shall continue vide the First Schedule.
Vide S. No. 145 of TABLE I ofnotification No. 45/2025-Customs dated 24th October, 2025, Nil BCD is prescribed on Specified goods imported for the manufacture of Copper-T contraceptives, falling under Chapter 39 or 74. On review, this entry is being allowed to lapse on 31st March, 2026 [S. No. I (67) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. Consequently, these goods will now attract applicable BCD rate w.e.f. 1st April, 2026. The applicable BCD rate on Polymers of vinyl chloride or of other halogenated olefins, in primary forms, falling under this chapter, which hitherto were prescribed through notification No. 45/2025-Customs dated 24th October, 2025 is being incorporated in the First Schedule w.e.f. from 1st May, 2026. Accordingly, the relevant exemption entry shall be omitted w.e.f. 1st May, 2026. [S. No. I (69) ofnotification No. 02/2026-Customs dated 1st February, 2026 refers]. There is no change in the applicable rate of duty. For details, please refer to S. No. 46 of Table 1 in Annexure III. Tariff item 3923 29 90 and the entries relating thereto are being substituted to create new tariff item for “Biodegradable” w.e.f. 1st May, 2026. [Clause 136(c)(i) read with the Fourth Schedule of the Finance Bill, 2026 refers] |
| Chapter 40
[Rubber and articles thereof] |
Vide S. No. 154 of TABLE I ofnotification No. 45/2025-Customs dated 24th October, 2025, concessional BCD rate of 7.5% is prescribed on Ethylene-PropyleneNon-Conjugated Diene Rubber (EPDM) under tariff item 4002 70 00 for use in the manufacture of insulated wires and cables falling under heading 8544 (except subheading 8544 11). On review, this entry is being allowed to lapse on 31st March, 2026 [S. No. I (72) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. Consequently, these goods will now attract BCD rate of 10% w.e.f. 1st April, 2026.
S. No. 157 of TABLE I ofnotification No. 45/2025-Customs dated 24th October, 2025 is being omitted w.e.f. 2nd February, 2026, being redundant [S. No. 75 ofnotification No. 02/2026-Customs dated 1st February, 2026 refers]. The applicable BCD rate on New pneumatic tyres of rubber or a kind used on aircraft, falling under tariff item 4011 30 00, hitherto prescribed through S.No. 157 of the notification, shall continue vide the First Schedule. Sl. No. 13A of notification No. 11/2021-Customs (AIDC) is also being modified to omit the reference to above S.No. 157. These goods (excluding those otherwise exempted) will continue to attract BCD at the rate of 2.5% and AIDC at the rate of 0.5%. |
| Chapter 41 [Raw hides and skins (other than furskins) and leather] | The applicable BCD rate on Wet blue leather (hides and skins), falling under this chapter, which hitherto was prescribed through notification No. 45/2025-Customs dated 24th October 2025, is being incorporated in the First Schedule w.e.f. from 1st May, 2026. Accordingly, the relevant exemption entry shall be omitted w.e.f. 1st May, 2026 [S. No. I (76) ofnotification No. 02/2026-Customs dated 1st February, 2026 refers]. There is no change in the applicable rate of duty. For details, please refer to S. No. 25 of Table 2 in Annexure III . |
| Chapter 42-46: No Change | |
| Chapter 47
[Pulp of wood or of other fibrous cellulosic material; recovered (waste and scrap) paper or paperboardpaper and paperboard and articles thereof] |
The applicable BCD rate on Rayon grade wood pulp, falling under this chapter, which hitherto was prescribed through notification No. 45/2025-Customs dated 24th October 2025, is being incorporated in the First Schedule w.e.f. from 1st May, 2026. Accordingly, the relevant exemption entry shall be omitted w.e.f. 1st May, 2026 [S. No. I (78) of notification No. 02/2026-Customs dated 1st February, 2026refers]. There is no change in the applicable rate of duty. For details, please refer to S. No. 26 of Table 2 in Annexure III. |
| Chapter 48
[Paper and paperboard; articles of paper pulp of paper or of paperboard] |
The applicable BCD rate on Other goods, excluding kites, falling under tariff item 4823 90 90, which hitherto was prescribed through notification No. 45/2025- Customs dated 24th October 2025, is being incorporated in the First Schedule w.e.f. from 1st May, 2026. Accordingly, the relevant exemption entry shall be omitted w.e.f. 1st May, 2026 [S. No. I (82) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. There is no change in the applicable rate of duty. For details, please refer to S. No. 27 of Table 2 in Annexure III. |
| Chapter 49 [Printed books, newspapers, pictures and other products of the printing industry; manuscripts, typescripts and plans] | The applicable BCD rate on Plans and drawings for architectural, engineering, industrial, commercial, topographical or similar purposes, being originals drawn by hand; hand-written texts; photographic reproductions on sensitised paper and carbon copies of the foregoing, falling under this chapter, which hitherto were prescribed through notification No. 45/2025-Customs dated 24th October, 2025 is being incorporated in the First Schedule w.e.f. from 1st May, 2026. Accordingly, the relevant exemption entry shall be omitted w.e.f. 1st May, 2026 [S. No. I (83) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. There is no change in the applicable rate of duty. For details, please refer to S. No 47 of Table 1 in Annexure III. |
| Chapter 50-51: No Change | |
| Chapter 52
[Cotton] |
The applicable BCD rate on Other cotton of staple length exceeding 32.0 mm, falling under this chapter, which hitherto were prescribed through notification No. 45/2025-Customs dated 24th October, 2025 is being incorporated in the First Schedule w.e.f. from 1st May, 2026. Accordingly, the relevant exemption entry shall be omitted w.e.f. 1st May, 2026. [S. No. I (84) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. There is no change in the applicable rate of duty. For details, please refer to S. No. 48 of Table 1 in Annexure III. |
| Chapter 53-55: No Change | |
| Chapter 56
[Wadding , felt and nonwovens ; special yarns ; twine , cordage , ropes and cables and articles thereof] |
Vide S. No. 172 of TABLE I of notification No. 45/2025-Customs dated 24th October, 2025, concessional BCD rate of 5% is prescribed on Hydrophilic and hydrophobic non- woven, imported for use in the manufacture of adult diapers under tariff items 5603 11 10, 5603 11 90. On review, this entry is being allowed to lapse on 31st March, 2026 [S. No. I (85) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. Consequently, these goods will now attract the applicable rate of BCD vide the First Schedule with effect from 1st April, 2026. |
| Chapter 57-65: No Change | |
| Chapter 66
[Umbrellas, sun umbrellas, walking-sticks, seat-sticks, whips, riding-crops and parts thereof] |
The BCD on umbrellas (other than garden umbrellas) classified under tariff items 6601 91 00 and 6601 99 00 is being revised from 20% to “20% or Rs. 60 per piece, whichever is higher”. [Clause 136(a) read with the Second Schedule of the Finance Bill, 2026, refers]. By virtue of declaration under the Provisional Collection of Taxes Act, 2023, the revised duty rate will come into force with effect from the midnight of 1st February / 2nd February, 2026. [Clause 136(a) read with Second Schedule of the Finance Bill, 2026, refers.]
The BCD on parts and components of umbrellas classified under tariff items 6603 20 00, 6603 90 10 and 6603 90 90 is also being revised from 10% to “10% or Rs. 25 per kg, whichever is higher” [Clause 136(a) read with Second Schedule of the Finance Bill 2026 refers]. By virtue of declaration under the Provisional Collection of Taxes Act, 2023, the revised duty rate will come into force with effect from the midnight of 1st February / 2nd February, 2026. [Clause 136(a), read with Second Schedule of the Finance Bill, 2026, refers.] |
| Chapter 67-70: No Change | |
| Chapter 71
[Natural or cultured pearls, precious or semi-precious stones, precious metals, metalsclad with precious metal, and articles thereof; imitation jewellery; coin] |
Vide S. No. 201 of TABLE I of notification No. 45/2025-Customs dated 24th October, 2025, concessional BCD rate of 5% is prescribed on spent catalyst or ash containing precious metals falling under heading 7112. On review, this entry is being allowed to lapse on 31st March, 2026 [S. No. I (95) ofnotification No. 02/2026-Customs dated 1st February, 2026 refers]. Consequently, these goods will now attract applicable BCD rate w.e.f. 1st April, 2026 (these goods are also covered under S. No. 202 of TABLE I of notification No. 45/2025-Customs dated 24.10.2025 whereby effective BCD rate of 5% has been prescribed). Consequential amendments are also being made to SWS exemption notification No. 11/2018-Customs. |
| Chapter 72 [Iron and Steel] | The applicable BCD rate on Ferro-nickel, falling under this chapter, which hitherto were prescribed through notification No. 45/2025-Customs dated 24th October, 2025 is being incorporated in the First Schedule w.e.f. from 1st May, 2026. Accordingly, the relevant exemption entry shall be omitted w.e.f. 1st May, 2026 [S. No. I (96) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. There is no change in the applicable rate of duty. For details, please refer to S. No. 49 of Table 1 in Annexure III.
Vide S. No. 213 of TABLE I ofnotification No. 45/2025-Customs dated 24th October, 2025, concessional BCD rate of 5% was prescribed on INVAR falling under heading 7229. On review, this entry is being omitted w.e.f. 2nd February, 2026. [S. No. I (100) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. Consequently, these goods will attract a BCD rate of 7.5% w.e.f. 2nd February 2026. |
| Chapter 73 [Articles of iron or steel] | S. No. 217 of TABLE I of notification No. 45/2025-Customs dated 24th October, 2025 is being omitted w.e.f. 2nd February, 2026, being redundant [S. No. I (102) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. The applicable BCD rate on Other screws and bolts, nuts and other non-threaded articles falling under tariff items 7318 15 00, 7318 16 00, 7318 29 90, hitherto prescribed through this notification /S.No. 217, shall continue vide the First Schedule.
Vide S. No. 218 of TABLE I ofnotification No. 45/2025-Customs dated 24th October, 2025, concessional BCD rate of 7.5% is prescribed on Metal parts (covered under CTH 7325) for use in the manufacture of electrical insulators falling under tariff heading 8546. On review, this entry is being allowed to lapse on 31st March, 2026 [S. No. I (103) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. Consequently, these goods will now attract BCD rate of 15% with effect from 1st April, 2026. Vide S. No. 219 of TABLE I of notification No. 45/2025-Customs dated 24th October, 2025, concessional BCD rate of 7.5% is prescribed on Pipes and tubes (covered under Chapter 73) for use in manufacture of boilers. On review, this entry is being allowed to lapse on 31st March, 2026 [S. No. I (104) of notification No. 02/2026- Customs dated 1st February, 2026 refers]. Consequently, these goods will now attract applicable rate of BCD with effect from 1st April, 2026. Vide S. No. 220 of TABLE I of notification No. 45/2025-Customs dated 24th October, 2025, concessional BCD rate of 5% is prescribed to Forged metal rings for manufacture of special bearings for use in wind operated electricity generators subject to certain conditions. On review, this entry is being merged with S. No. 230 of notification No. 45/2025-Customs dated 24th October, 2025 with effect from 2nd February, 2026. S. No. 230 provides a concessional BCD rate of 5% to parts and subparts for manufacture/maintenance of wind operated electricity generators. [S. No. I (105) and I (117) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. These changes are being made effective from 2nd February, 2026. In headings 7305 and 7306, various tariff items and their entries are being substituted to create twenty-eight new tariff items w.e.f. 1st May, 2026. [Clause 136(c)(i) read with Fourth Schedule of the Finance Bill, 2026, refers] |
| Chapter 74 [Copper and articles thereof] | The applicable BCD rate on Blister copper, falling under this chapter, which hitherto were prescribed through notification No. 45/2025-Customs dated 24th October, 2025 is being incorporated in the First Schedule w.e.f. from 1st May, 2026. Accordingly, the relevant exemption entry shall be omitted w.e.f. 1st May, 2026. [S. No. I (106) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. There is no change in the applicable rate of duty. For details, please refer to S. No. 50 of Table 1 in Annexure III.
Vide S. No. 222 of TABLE I of notification No. 45/2025-Customs dated 24th October, 2025, concessional BCD rate of Nil is prescribed to “Copper wires or refined copper of which the maximum cross-sectional dimension exceeds 6mm for the manufacture of photovoltaic ribbon or tinned copper interconnect or cell interconnect or string interconnect or the photovoltaic connect or solar ribbon for the manufacture of solar photovoltaic cell or modules”. On review, the entry is being modified to enhance its scope, and will read as below: “Copper wire of refined copper of which the maximum cross-sectional dimension exceeds 6mm or copper rods of refined copper, for the manufacture of photovoltaic ribbon or tinned copper interconnect or cell interconnect or string interconnect or the photovoltaic connect or photovoltaic ribbon or solar ribbon for manufacture of solar photovoltaic cell or modules” falling under HS 7407 and 7408 [S. No. I (107) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. This change is being made effective from 2nd February, 2026. |
| Chapter 75-77: No Change | |
| Chapter 78 [Lead and articles thereof] | The applicable BCD rate on Lead waste and scrap, falling under this chapter, which hitherto were prescribed through notification No. 45/2025-Customs dated 24th October 2025, is being incorporated in the First Schedule w.e.f. from 1st May, 2026. Accordingly, the relevant exemption entry shall be omitted w.e.f. 1st May, 2026. [S. No. I (108) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. There is no change in the applicable rate of duty. For details, please refer to S. No. 51 of Table 1 in Annexure III. |
| Chapter 79 [Zinc and articles thereof] | The applicable BCD rate on Zinc waste and scrap, falling under this chapter, which hitherto were prescribed through notification No. 45/2025-Customs dated 24th October 2025, is being incorporated in the First Schedule w.e.f. from 1st May, 2026. Accordingly, the relevant exemption entry shall be omitted w.e.f. 1st May, 2026. [S. No. I (109) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. There is no change in the applicable rate of duty. For details, please refer to S. No. 52 of Table 2 in Annexure III. |
| Chapter 80: No Change | |
| Chapter 81 [Other base metals; cermets; articles thereof] | The applicable BCD rate on Cobalt powders, and Tungsten (wolfram) bars and rods, falling under this chapter, which hitherto were prescribed through notification No. 45/2025-Customs dated 24th October, 2025 is being incorporated in the First Schedule w.e.f. from 1st May, 2026. Accordingly, the relevant exemption entry shall be omitted w.e.f. 1st May, 2026. [S. No. I (111) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. There is no change in the applicable rate of duty. For details, please refer to S. Nos. 53 of Table 1 and 28 of Table 2 in Annexure III.
The BCD exemption on Unwrought, waste and scarp and powders of Gallium, Germanium, Indium, Niobium and Vanadium, falling under tariff item 8112 92 00, which hitherto were prescribed through notifications No. 36/2024-Customs dated 23rd July, 2024, is now being prescribed through the consolidated notification No. 45/2025- Customs dated 24th October 2025 vide insertion of S. No. 226A in TABLE I [S. No. I (112) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. Accordingly, the relevant exemption entry in notification No. 36/2024-Customs hall be omitted w.e.f. 2nd February, 2026 [S. No. 6 of notification No.01/2026-Customs dated 1st February, 2026 refers]. |
| Chapter 82-83: No Change | |
| Chapter 84
[Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof.] |
BCD rate on all goods falling under tariff item 8401 30 00 [Fuel elements (cartridges), non-irradiated] for generation of nuclear power is being decreased from 7.5% to Nil vide insertion of S. No. 227A in TABLE I of notification No. 45/2025- Customs [S. No. I (114) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. This change is being made effective from 2nd February, 2026.
BCD rate on Control and Protection Absorber Rods & Burnable Absorber Rods falling under tariff item 8401 40 00 for generation of nuclear power is being decreased from 7.5% to Nil vide insertion of S. No. 227B in TABLE I of notification No. 45/2025- Customs [S. No. I (114) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. This change is being made effective from 2nd February, 2026. S. No. 69A of notification No. 25/2002 dated 1st March, 2002 is being modified to extend BCD exemption on Capital goods for use in the manufacturing of Lithium-Ion Cells for batteries of Electrically Operated Vehicles, to cover batteries of Battery Energy Storage Systems (BESS) [S. No. 5 of notification No. 01/2026-Customs dated 1st February, 2026 refers]. This change is being made effective from 2nd February, 2026. Vide S. No. 231 of TABLE I of notification No. 45/2025-Customs dated 24th October, 2025, concessional BCD rate of 5% is prescribed on Permanent magnets for manufacture of PM synchronous generators above 500KW for use in wind operated electricity generator (covered under 84 or any other Chapter). On review, this entry is being allowed to lapse on 31st March, 2026 [S. No. I (118) of notification No. 02/2026- Customs dated 1st February, 2026 refers]. Consequently, these goods will now attract applicable rate of BCD with effect from 1st April, 2026. Vide S. No. 243 of TABLE I of notification No. 45/2025-Customs dated 24th October, 2025, concessional BCD rate of 5% is prescribed on High-speed cold-set and High-speed Heat-set web offset printing machines with a minimum speed of 70,000 copies per hour, along with mail room equipment (covered under 84 or any other Chapter). On review, this entry is being allowed to lapse on 31st March, 2026 [S. No. I (127) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. Consequently, these goods will now attract applicable rate of BCD with effect from 1st April, 2026. Vide S. No. 258 of TABLE I of notification No. 45/2025-Customs dated 24th October, 2025, concessional BCD rate of 7.5% was prescribed on Coffee roasting, brewing or vending machines for use in the manufacture or processing of coffee falling under this chapter. On review, this entry is being omitted w.e.f. 2nd February, 2026. [S. No. I (133) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. Consequently, these goods will attract applicable rate of BCD through the First Schedule. Vide S. No. 271 of TABLE I of notification No. 45/2025-Customs dated 24th October, 2025, concessional BCD rate of Nil is prescribed on Cash dispenser or automatic banknote dispenser and its parts (covered under tariff sub-heading 8472 90 and 8473 40). On review, this entry is being allowed to lapse on 31st March, 2026 [S. No. I (139) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. Consequently, these goods will now attract applicable rate of BCD with effect from 1st April, 2026. The applicable BCD rate on Reactors, column or towers, or chemical storage tanks, All goods under tariff item 8415 90 00 other than indoor or outdoor units of splitsystem air conditions, and All goods under tariff item 8421 99 00 other than Reverse Osmosis (RO) membrane element for household type filters, which hitherto were prescribed through notification No. 45/2025-Customs dated 24th October, are being incorporated in the First Schedule w.e.f. from 1st May, 2026. Accordingly, the relevant exemption entries shall be omitted w.e.f. 1st May, 2026. S. No. I (130, 132 and 134) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. There is no change in the applicable rate of duty. For details, please refer to S. Nos. 54 of Table 1 and 29-30 of Table 2 in Annexure III. |
| Chapter 85 [Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles] | BCD on specified goods falling under tariff items 8501 10 20, 8504 31 00, 8516 80 00 and 8516 90 00 for use in the manufacture of Microwave Ovens under tariff item 8516 50 00 is being exempted vide insertion of S. No. 278A in TABLE I of notification No. 45/2025-Customs [S. No. I (146) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. This change is being made effective from 2nd February, 2026.
Vide S. No. 275 of TABLE I of notification No. 45/2025-Customs dated 24th October, 2025, concessional BCD rate of Nil is prescribed on Television equipment, cameras and other equipment for taking films, imported by a foreign film unit or television team (covered under 85 or any other Chapter). On review, this entry is being allowed to lapse on 31st March, 2026 [S. No. I (143) of notification No. 02/2026- Customs dated 1st February, 2026 refers]. Consequently, these goods will now attract applicable rate of BCD with effect from 1st April, 2026. Vide S. No. 276 of TABLE I of notification No. 45/2025-Customs dated 24th October, 2025, concessional BCD rate of Nil is prescribed on Photographic, filming, sound recording and radio equipment, raw films, video tapes and sound recording tapes, if imported into India after having been exported therefrom (covered under 85 or any other Chapter). On review, this entry is being allowed to lapse on 31st March, 2026 [S. No. I (144) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. Consequently, these goods will now attract applicable rate of BCD with effect from 1st April, 2026. Vide S. No. 285 of TABLE I of notification No. 45/2025-Customs dated 24th October, 2025, concessional BCD rate of 5% was prescribed on Parts of Radio Trunking terminals falling under this chapter. On review, this entry is being omitted w.e.f. 2nd February, 2026. [S. No. I (149) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. Consequently, these goods will attract a BCD rate of 15% w.e.f. 2nd February 2026. Vide S. No. 287 of TABLE I of notification No. 45/2025-Customs dated 24th October, 2025, Nil BCD was prescribed on CD-ROMs containing books of an educational nature, journals, periodicals (magazines) or newspapers falling under this chapter. On review, this entry is being omitted w.e.f. 2nd February, 2026. [S. No. I (150) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. Consequently, these goods will attract a BCD rate of 10% w.e.f. 2nd February 2026. Vide S. No. 291 of TABLE I of notification No. 45/2025-Customs dated 24th October, 2025 concessional BCD rate of Nil is prescribed on Parts and Components of Digital Still Image Video Cameras (covered under 85 or any other Chapter). On review, this entry is being allowed to lapse [S. No. I (151) of notification No. 02/2026- Customs dated 1st February, 2026 refers]. Consequently, these goods will now attract applicable rate of BCD with effect from 1st April, 2026. Vide S. No. 309 of TABLE I of notification No. 45/2025-Customs dated 24th October, 2025, concessional BCD rate of 5% is prescribed on Raw materials or parts for use in manufacture of e-Readers (covered under any other Chapter). On review, this entry is being allowed to lapse on 31st March, 2026 [S. No. I (162) ofnotification No. 02/2026-Customs dated 1st February, 2026 refers]. Consequently, these goods will now attract applicable rate of BCD with effect from 1st April, 2026. Vide S. No. 1 of TABLE IV of notification No. 45/2025-Customs dated 24th October, 2025, concessional BCD rate is prescribed on Motion pictures, music, gaming software for use on gaming consoles printed or recorded on media (covered under chapter heading 3706 or 8523). On review, this entry is being allowed to lapse on 31st March, 2026 [S. No. VII of notification No. 02/2026-Customs dated 1st February, 2026 refers]. Consequently, these goods will now attract applicable rate of BCD with effect from 1st April, 2026. The applicable BCD rates on Battery Separators and Parts suitable for use solely or principally with the apparatus of headings 8525, 8526 or 8527, falling under this chapter, which hitherto were prescribed through notification No. 45/2025-Customs dated 24th October, 2025ication No. 45/2025-Customs dated 24th October, 2025 are being incorporated in the First Schedule w.e.f. from 1st May, 2026. Accordingly, the relevant exemption entries shall be omitted w.e.f. 1st May, 2026 [S. No. I (148 and 159) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. There is no change in the applicable rate of duty. For details, please refer to S. Nos. 31-32 of Table 2 in Annexure III. |
| Chapter 86
[Railway or tramway locomotives, rolling-stock and parts thereof; railway or tramway track fixtures and fittings and parts thereof; mechanical (including electro-mechanical) traffic signaling equipment of all kinds] |
Vide S. No. 310 of TABLE I of notification No. 45/2025-Customs dated 24th October, 2025, concessional BCD rate of 5% was prescribed on Loco simulators falling under this chapter. On review, this entry is being omitted w.e.f. 2nd February, 2026. [S. No. I (163) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. Consequently, these goods will attract applicable rate of BCD through the First Schedule.
The applicable BCD rates on Refrigerated containers, falling under this chapter, which hitherto was prescribed through notification No. 45/2025-Customs dated 24th October, is being incorporated in the First Schedule w.e.f. from 1st May, 2026. Accordingly, the relevant exemption entry shall be omitted w.e.f. 1st May, 2026 [S. No. I (164) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. There is no change in the applicable rate of duty. For details, please refer to S. No. 33 of Table 2 in Annexure III. |
| Chapter 87: No Change | |
| Chapter 88
[Aircraft, spacecraft, and parts thereof] |
BCD is being exempted on raw materials for manufacture of parts of aircraft for maintenance, repair, or overhauling of aircraft or components or parts of aircraft, including engines (provided that the goods are imported by Public Sector Units under the Ministry of Defence), vide insertion of S. No. 334A in TABLE I of notification No. 45/2025-Customs [S. No. I (171) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. This exemption is subject to conditions prescribed therein. This change is being made effective from 2nd February, 2026.
BCD is being exempted on components or parts, including engines, of aircraft, for the manufacture of aircraft and parts of such aircraft, vide insertion of S. No. 335A in TABLE I of notification No. 45/2025-Customs [S. No. I (173) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. This exemption is subject to conditions prescribed therein. This change is being made effective from 2nd February, 2026. Circular No. 02/2026-Customs dated 1st February, 2026 is being issued to clarify the term “RPA (Remote Pilot Aircraft)” mentioned in S. No. 59 of TABLE II of notification No. 45/2025-Customs dated 24.10.2025. |
| Chapter 89: No Change | |
| Chapter 90
[Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof] |
Vide S. No. 370 of TABLE I of notification No. 45/2025-Customs dated 24th October, 2025, concessional BCD rate of 7.5% is prescribed on X-Ray tubes for manufacture of X-Ray Machines for medical, surgical or veterinary use. On review, this entry is being allowed to lapse on 31st March, 2026 [S. No. I (188) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. Consequently, these goods will now attract BCD rate of 10% with effect from 1st April, 2026.
Vide S. No. 372 of TABLE I of notification No. 45/2025-Customs dated 24th October, 2025, concessional BCD rate of 7.5% is prescribed on Flat panel detector for use in manufacture of X-Ray machine. On review, this entry is being allowed to lapse on 31st March, 2026. [S. No. I (189) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. Consequently, these goods will now attract BCD rate of 10% with effect from 1st April, 2026. |
| Chapter 91-94: No Change | |
| Chapter 95
[Toys, games and sports requisites; parts and accessories thereof] |
Vide S. No. 397 of TABLE I of notification No. 45/2025-Customs dated 24th October, 2025, concessional BCD rate of 5% is prescribed on Parts of video games for the manufacture of video games. On review, this entry is being allowed to lapse on 31st March, 2026. [S. No. I (199) of notification No. 02/2026-Customs dated 1st February, 2026 refers]. Consequently, these goods will now attract BCD rate of 20% with effect from 1st April, 2026.
Parts of electronic toys for manufacture of electronic toys under S.No. 396 of TABLE I in notification No. 45/2025-Customs are being exempted from SWS with effect from 2nd February, 2026. Henceforth, all goods under heading 9503 will be exempt from the levy of SWS. |
| Chapter 96-97: No Change | |
| Chapter 98
[Project imports; laboratory chemicals; passengers’ baggage, personal importations by air or post; ship stores] |
The exemption under S. No. 66 of TABLE II in notification No. 45/2025-Customs has been modified to cover goods required for setting up of specified Nuclear Power Project, irrespective of their capacity, as certified by an officer not below the rank of a Joint Secretary to the Government of India in the Department of Atomic Energy. Further, the validity of this exemption is being extended from 30th September, 2027 to 30th September, 2035. The eligibility of contracts covered under the scope of this exemption is also being extended to all contracts registered with the Customs Houses concerned on or before 30th September, 2035. This change is being made effective from 2nd February, 2026 [S.No. IV(c), V, VI(a) notification No.02/2026 -Customs, dated 1st February, 2026 refers].
The tariff rate is being reduced from 20% to 10% on all dutiable goods, imported for personal use under heading 9804. This change shall come into effect from the 1st of April, 2026 [Clause 136 (b) read with Third Schedule of the Finance Bill, 2026, refers]. Further, SWS will be levied on all goods falling under heading 9804 (dutiable goods imported for personal use) with effect from 1st April, 2026 [S.No.1 of notification No.03/2026-Customs refers]. |
| OTHER CHANGES | S. Nos. 12, 140, 142 and 143 of TABLE I of notification No. 45/2025-Customs dated 24th October, 2025, provide for concessional duty on import of specified inputs for manufacture and export of value-added products, subject to end-use conditions. The time period for exporting products manufactured using inputs imported under this scheme has been enhanced from six months to one year. Accordingly, a new condition is being inserted against S. Nos. 12, 140 ,142 and 143 vide S.No I (6, 62, 64, and 65). of notification No. 02/2026-Customs dated 01.02.2026. The changes will come into effect from 2nd February, 2026.
The duty exemption available for import of specified inputs for use in manufacture of goods meant for export, that is presently available for leather and synthetic footwear, is now being extended to exporters of shoe-uppers. S.No. 143 of TABLE I of notification No. 45/2025-Customs is being amended vide S.No. I (65) of notification No. 02/2026-Customs dated 01.02.2026. The changes will come into effect from 2nd February, 2026. |
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Legislative changes in the Customs Act, Customs Tarff Act and Rules:
> Section 1 — Extension of Jurisdiction
Section 1(2) has been amended to extend the applicability of the Act beyond India’s territorial waters to cover fishing and fishing-related activities by Indian-flagged fishing vessels.
Our Explanation:
This amendment expands the territorial scope of the Customs Act so that it applies to Indian fishing vessels operating outside territorial waters. This enables the Customs administration to regulate, monitor, and legally recognise fish harvested by Indian-flagged vessels on the high seas. The measure ensures better governance and compliance in offshore fishing operations.
> Section 2 — New Definition (Indian-Flagged Fishing Vessel)
A new clause (28A) defines Indian-flagged fishing vessel.
Our Explanation:
The new definition clarifies what constitutes an Indian fishing vessel for regulatory purposes. It covers vessels used or intended to be used for fishing and entitled to fly the Indian flag, strengthening administrative clarity and enabling application of the newly introduced provisions such as Section 56A.
> Section 28(6) — Penalty Under Sub-section (5) Deemed as Charge
Penalty paid voluntarily under Section 28(5) will be treated as a charge for non-payment of duty during later adjudication under Section 28(6).
Our Explanation:
This corrects an earlier gap in law by ensuring that voluntary payment of penalty during self-assessment or investigation is legally recognised as a statutory charge. It prevents disputes where penalties were paid but not formally deemed linked to duty non-payment. This amendment provides legal certainty and reduces litigation.
> Section 28J — Validity of Advance Ruling Increased to Five Years
Validity of advance rulings extended from three to five years. Existing rulings may be extended for five years upon request.
Our Explanation:
The purpose is to give stability and predictability to importers/exporters relying on advance rulings to plan operations. By extending the validity and permitting extension of existing rulings, the amendment reduces administrative burden and enhances business certainty.
> New Section 56A — Special Provisions for Fishing Activities Beyond Territorial Waters
Introduces duty-free re-import of fish harvested outside territorial waters by Indian-flagged vessels and permits recognition of landings at foreign ports as “exports”.
Our Explanation:
This new section modernises customs treatment of deep-sea fishing operations. Fish caught outside Indian territorial waters can now be brought into India duty-free, and landings at foreign ports are deemed exports, enabling benefits under export-promotion schemes. It empowers the Board to prescribe rules regarding declaration, custody, assessment, and clearance. This aligns customs law with evolving offshore economic activity.
> Section 67 — Removal of Warehoused Goods Between Warehouses
Replaces old section to remove the requirement of prior permission for transfer of warehoused goods.
Our Explanation:
The substituted section simplifies warehouse-to-warehouse movements by removing the cumbersome requirement of prior permission from customs officers. The transfer is now allowed subject to prescribed conditions, improving logistics efficiency for trade, especially bonded operations.
>Section 84 — Inclusion of Custody in Board’s Powers
Board can now regulate custody of goods in addition to examination.
Our Explanation:
This Amendment the scope of regulatory authority to frame procedures not only for examination but also for custody of goods, enabling updated automation, risk-based assessment, and digital processing for imports/exports. It supports integration with revised baggage and warehousing rules.
| CHANGES IN CUSTOMS RULES AND REGULATIONS |
| (1) Deferred duty payment is being made monthly from the existing 15 days and a new class of ‘eligible importers’ is being created. This is being done by amending the existing Deferred Payment of Import Duty Rules, 2016.
(2) Baggage Rules, 2016 is being superseded by the Baggage Rules, 2026 to rationalize the baggage provisions and addressing passenger related concerns at airports and resolution of interpretational issues; provide clarity in temporarily carriage of goods brought in or taken out to avoid unnecessary detention of goods, and restructure Transfer of Residence benefits for Indian residents and foreign professionals based on duration of stay. These changes shall come into effect from midnight of 02.02.2026. (3) The Customs Baggage Declaration Regulations, 2013, the Baggage (Transit to Customs Stations) Regulations, 1967 and the Passenger’s Baggage (Levy of Fees) Regulations, 1966 are being superseded by the Customs Baggage (Declaration and Processing) Regulations, 2026 to consolidate all baggage-related procedural provisions into a single, comprehensive and facilitative framework. (4) A Master Circular consolidating the statutory provisions along with applicable instructions from existing circulars/ instructions and to provide operational clarity on key aspects of baggage rules and regulations is being issued. |
Amendments to the First Schedule to the Customs Tariff Act, 1975
> Clause 136(a) — Amendments via Second Schedule (Composite Duty Imposition) Introduction of Composite Duty on Certain Goods
Clause 136(a) amends the First Schedule to impose composite customs duties (i.e., “specific duty or ad valorem, whichever is higher”) on specified tariff lines, mainly under Chapter 66 relating to umbrellas and their parts.
Our Explanation:
The Second Schedule, as reflected in the Explanatory Memorandum, introduces composite duties to strengthen protection for the MSME sector and prevent undervaluation-based duty evasion. Specifically, tariff items 6601 91 00 and 6601 99 00 (umbrellas other than garden umbrellas) will attract 20% or ₹60 per piece, whichever is higher, while tariff items under 6603 (umbrella parts and accessories) will attract 10% or ₹25/kg., whichever is higher. The intent is to ensure stable revenue and address persistent concerns around misdeclaration and low declared values.
> Clause 136(b) — Amendments via Third Schedule (Rate Revision w.e.f. 1 April 2026)
Revision of Tariff Rates for Specific Goods Effective 1 April 2026
Reduces the Basic Customs Duty on goods under Heading 9804 (personal-use imports) from 20% to 10% with effect from 1 April 2026.
Our Explanation:
The Third Schedule revises the statutory duty structure for goods imported under CTH 9804 — “All dutiable goods, imported for personal use.” The BCD rate reduction from 20% to 10% is intended to rationalise duties in line with international best practices and reduce burden on individuals when importing personal effects. The change does not alter exemptions or baggage provisions under Customs but reduces the statutory default rate applicable where no separate exemption exists.
> Clause 136(c) — Amendments via Fourth and Fifth Schedules (Creation of New Tariff Entries & Rate Adjustments w.e.f. 1 May 2026)
Creation of New Tariff Lines and Tariff Re-alignment Effective 1 May 2026
Effective 1 May 2026, Clause 136(c) modifies the First Schedule to:
- Create new tariff entries (Fourth Schedule), and
- Revise tariff rates for numerous items (Fifth Schedule).
These changes primarily shift existing concessional/exempt rates (presently given through notifications) directly into the statutory tariff.
Our Explanation:
This reform is a comprehensive tariff rationalisation exercise. The Fourth Schedule introduces new tariff lines across Chapters such as 0306 (Krill), 0802 (Pecan nuts), 0810/0811/0813 (Cranberries/Blueberries—fresh, frozen, dried), 1207 (Shea nuts), 2008 (prepared berries), etc. These new entries ensure precise classification of imported goods in line with global Harmonized System updates.
Simultaneously, the Fifth Schedule revises tariff rates for a wide set of goods while not altering the effective duty, since these duties were already being applied via conditional exemption notifications. From 1 May 2026, those notification-based rates will stand absorbed into the First Schedule, and the corresponding exemptions will be deleted. The categories include:
- Agricultural and food products: almonds, walnuts, makhana, seafood inputs
- Minerals and critical raw materials: natural graphite, quartz, strontium compounds, rare earth metals
- Chemicals & industrial inputs: phosphoric acid, propylene oxide, silicon, cobalt compounds
- Other specialised tariff entries
For rates referred to ANNEXURE A
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SOCIAL WELFARE SURCHARGE (SWS)
A. Specified goods are exempted from SWS vide notification No. 11/2018-Customs. The following changes have been made in notification No. 11/2018-Customs, consequent to omission of certain entries from exemption notifications. The effective duty incidence is unchanged and the following goods continue to remain exempted from levy of Social Welfare Surcharge (SWS). The changes are technical in nature.
i. Sl. No. 1 of notification No. 11/2018-Customs is being amended to include natural graphite (heading 2504), quartz and quartzite (heading 2506), silicon dioxide (tariff item 2811 22 00), and artificial graphite (heading 3801). Presently, the said goods are exempted from SWS vide Sl. No. 1, 3, 20 and 41 of notification No. 36/2024-Customs dated 23.07.2024. Subsequent to the omission of these exemption entries from the notification No. 36/2024-Customs, the said goods will continue to remain exempt from SWS vide modified Sl. No. 1 of notification No. 11/2018-Customs. This change will come into effect from 01.05.2026.
ii. Presently, all goods under sub-heading 2106 90, excluding compound alcoholic preparations of a kind used for the manufacture of beverages, of an alcoholic strength by volume exceeding 0.5% vol., determined at a temperature of 20 degrees centigrade, attract concessional BCD rate of 50% vide S. No. 67 of TABLE I in notification No. 45/2025-Customs (along with SWS). The exemption entry is being omitted from notification No. 45/2025-Customs and the concessional BCD rate will be shifted to the First Schedule, with effect from 01.05.2026. As a part of consequential changes, Sl. No. 7 of notification No. 11/2018-Customs is being omitted and Sl. No. 1 of notification No. 11/2018-Customs is being amended to include tariff item 2106 90 51 covering compound alcoholic preparations. Incidence of SWS for goods under subheading 2106 90 will remain unchanged. This change will come into effect from 01.05.2026.
B. Spent catalyst and ash containing precious metals falling under heading 7112 is exempt from SWS vide Sl. No. 54A of notification No. 11/2018-Customs. The description of the entry at Sl. No. 54A is being modified with effect from 01.04.2026 to omit the reference to S.No. 201 of TABLE I of notification No. 45/2025-Customs which is being lapsed on 31.03.2026. The exemption from SWS, vide modified Sl. No. 54A of notification No. 11/2018-Customs, will continue unchanged for spent catalyst or ash containing precious metals.
C. Social Welfare Surcharge (SWS) will be levied on all goods falling under heading 9804 (all dutiable goods imported for personal use) with effect from 01.04.2026.
D. Parts of electronic toys for manufacture of electronic toys under S.No. 396 of TABLE I in notification No. 45/2025-Customs are being exempted from SWS with effect from 02.02.2026. Henceforth, all goods under heading 9503 will be exempt from the levy of SWS.
AGRICULTURE INFRASTRUCTURE AND DEVELOPMENT CESS (AIDC)
New pneumatic tyres, of rubber, of a kind used on aircraft falling under tariff item 4011 30 00 (other than goods covered under S.Nos. 155 and 156 of TABLE I of notification No. 45/2025- Customs), attract 0.5% AIDC vide Sl. No. 13A of notification No. 11/2021-Customs. The description of the entry at Sl. No. 13A is being modified with effect from 02.02.2026 to omit the reference to S. No. 157 of TABLE I of notification No. 45/2025-Customs, following the omission of the said exemption entry with effect from 02.02.2026. The AIDC rate will continue unchanged at 0.5% for New pneumatic tyres, of rubber of a kind used on aircraft (other than those attracting NIL BCD).
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CHANGES IN CENTRAL EXCISE
Highlights of Important Changes in Central Excise
1. Revision of National Calamity Contingent Duty (NCCD) on Tobacco Products
Key Changes
- The Seventh Schedule to the Finance Act, 2001 has been amended to revise NCCD rates on the following tobacco items effective 1st May, 2026:
- Chewing tobacco (HS 2403 99 10) → NCCD fixed at 25%
- Jarda scented tobacco (HS 2403 99 30) → NCCD fixed at 25%
- Other tobacco products (HS 2403 99 90) → NCCD fixed at 25%
Highlight
- Although the Schedule rates are revised from 25% to 60%, the effective duty continues to remain at 25% due to exemption under this new notification.
2. Excise Duty Treatment on Blended CNG (CNG Mixed with Biogas/CBG)
New Entry Introduced
- A new tariff entry 9A has been inserted in Notification 11/2017-CE relating to:
- Compressed Natural Gas (CNG) blended with Biogas/Compressed Biogas (CBG) – Tariff Code 2711 21 00
- Excise duty rate fixed at 14%
Major Relief / Exclusion
- For calculating excise duty on blended CNG:
- Value of CBG/Biogas present in the blended CNG shall be excluded.
- Also excluded: GST taxes (CGST, SGST, UTGST, IGST) already paid on the Biogas/CBG component.
- This ensures duty is applied only on the fossil-fuel (CNG) portion, not on the renewable component.
Additional Clarification
- Explanation 3 inserted to define “appropriate taxes” clearly (CGST, SGST, UTGST, IGST).
Effective Date
- Effective from 2nd February, 2026.
3. Rescinding of Previous CBG-Related Excise Notification (No. 05/2023-CE)
What Has Changed
- Notification 05/2023-Central Excise (dated 01-02-2023) has been rescinded.
- This aligns the excise framework with the updated treatment of blended CNG introduced in Notification 02/2026.
Effective Date
- Comes into effect 2nd February, 2026.
4. Deferment of Higher Excise Duty on Unblended Diesel
Key Amendment
- The additional excise duty of ₹2 per litre on unblended diesel (earlier notified under Notification 11/2017-CE) has been further deferred.
- The previous operative date 2026 is now substituted with 2028.
Implication
- Higher duty on unblended diesel will NOT apply until 31st March, 2028.
“Annexure-A”
AMENDMENTS TO THE FIRST SCHEDULE TO THE CUSTOMS TARIFF ACT, 1975
| A. | Modification in Tariff rate (to be effective from 02.02.2026) * [Clause 136(a) of the Finance Bill, 2026]
*Will come into effect immediately through a eclaration under the Provisional Collection of Taxes Act, 2023 |
Rate of Basic Customs Duty | ||
| S. No. | Heading, sub-heading, tariff item | Commodity | From (per cent) | To (per cent) |
| MSME sector | ||||
| 1. | 6601 91 00,
6601 99 00 |
Umbrellas (other than garden umbrellas) | 20% | 20% or
Rs. 60 per piece, whichever is higher |
| 2. | 6603 20 00,
6603 90 10, 6603 90 90 |
Parts, trimmings and accessories of articles of heading 6601 to 6602 | 10% | 10% or
Rs. 25 per kg., whichever is higher |
| B. | Decrease in Tariff rate (to be effective from
01.04.2026) [Clause 136(b) of the Finance Bill, 2026] |
Rate of Basic Customs Duty | B. | |
| 1. | 9804 | All dutiable goods, imported for
personal use |
20% | 10% |
| C. | Tariff rate changes (without any change in effective rate of duty) [to be effective from 01.05.2026, unless otherwise specified] * [Clause 136(c) of the Finance Bill, 2026]
*Note:
1. The current applied rate of Basic Customs Duty on these commodities operate through their respective exemption/concessional duty notification(s). Such corresponding entries would be omitted from the concerned notification(s) with effect from 01.05.2026, as the same would operate through the Customs Tariff Act, 1975, in the manner as detailed below. It is an exercise for simplification of the Customs tariff structure and applicable Basic Customs Duty rate on these items would remain unchanged. 2. Heading and sub-heading referred in column (2) shall include all tariff items under such heading or sub-heading. The said changes are to be read with consequent amendments related to Social Welfare Surcharge (SWS) and Agriculture Infrastructure and Development Cess (AIDC). |
Rate of Duty | C. | |
| S. No. | Heading,
sub-heading tariff item |
Commodity | From | To |
| (1) | (2) | (3) | (4) | (5) |
| 1. | 0207 25 00,
0207 27 00 |
Meat and edible offal of turkeys, frozen | 30% | 5% |
| 2. | 0306 36 60 | Artemia | 5% | Nil |
| 3. | 0511 91 40 | Artemia cysts | 5% | Nil |
| 4. | 0802 11 00 | Almonds, in shell | Rs.42 per kg | Rs.35 per kg |
| 5. | 0802 12 00 | Almonds, shelled | Rs.120 per kg | Rs. 100 per kg |
| 6. | 0802 31 00 | Walnuts, in shell | 120% | 100% |
| 7. | 1209
(other than those falling under sub headings 1209 91 and 1209 99) |
Seeds, fruit and spores, of a kind used for sowing | 30% | 15% |
| 8. | 1505 | Wool grease and fatty substances derived therefrom (including lanolin) | 30% | 15% |
| 9. | 2008 19 21,
2008 19 22, 2008 19 29, 2008 19 91 |
Makhana, other roasted nuts and seeds | 150% | 30% |
| 10. | 2008 19 92 | Other nuts, otherwise prepared or preserved | 150% | 30% |
| 11. | 2309 90 31 | Prawn and shrimps feed | 15% | 5% |
| 12. | 2504 | Natural graphite | 5% | 2.5% |
| 13. | 2505 | Natural sands of all kinds, whether or not coloured, other than metal bearing sands of chapter 26 of the
Customs Tariff Act, 1975 |
5% | Nil |
| 14. | 2506 | Quartz (other than natural sands); quartzite, whether or not roughly trimmed or merely cut, by sawing or otherwise, into blocks or slabs of a
rectangular (including square) shape |
5% | 2.5% |
| 15. | 2530 90 91 | Strontium sulphate (natural ore) | 5% | Nil |
| 16. | 2701,
2702, 2703 |
Coal; briquettes, ovoids and similar solid fuels manufactured from coal; Lignite, whether or not agglomerated, excluding jet; Peat (including peat litter), whether or
not agglomerated |
5% | 2.5% |
| 17. | 2709 00 10 | Petroleum crude | 5% | Re 1 per tonne |
| 18. | 2804 50 20 | Tellurium | 5% | Nil |
| 19. | 2804 61 00 | Silicon, containing by weight not less than 99.99% of silicon | 5% | Nil |
| 20. | 2804 69 00 | Silicon, other | 5% | Nil |
| 21. | 2804 90 00 | Selenium | 5% | Nil |
| 22. | 2805 30 00 | Rare-earth metals, scandium and
yttrium, whether or not intermixed or inter alloyed |
5% | Nil |
| 23. | 2809 20 10 | Phosphoric Acid | 7.5% | 5% |
| 24. | 2811 22 00 | Silicon dioxide | 7.5% | 2.5% |
| 25. | 2816 40 00 | Oxides, hydroxides and peroxides, of strontium or barium | 7.5% | Nil |
| 26. | 2822 00 10 | Cobalt oxides | 7.5% | Nil |
| 27. | 2822 00 20 | Cobalt hydroxides | 7.5% | Nil |
| 28. | 2822 00 30 | Commercial cobalt oxides | 7.5% | Nil |
| 29. | 2825 20 00 | Lithium oxide and hydroxide | 7.5% | Nil |
| 30. | 2825 30 | Vanadium oxides and hydroxides | 7.5% | Nil |
| 31. | 2825 60 10 | Germanium oxides | 7.5% | Nil |
| 32. | 2825 70 | Molybdenum oxides and hydroxides | 7.5% | Nil |
| 33. | 2825 80 00 | Antimony Oxides | 7.5% | Nil |
| 34. | 2825 90 20 | Cadmium oxide | 7.5% | Nil |
| 35. | 2827 35 00 | Chlorides of Nickel | 7.5% | Nil |
| 36. | 2827 39 30 | Strontium chloride | 7.5% | Nil |
| 37. | 2833 24 00 | Sulphates of Nickel | 7.5% | Nil |
| 38. | 2834 21 00 | Nitrates of potassium | 7.5% | Nil |
| 39. | 2836 91 00 | Lithium carbonates | 7.5% | Nil |
| 40. | 2836 92 00 | Strontium carbonate | 7.5% | Nil |
| 41. | 2910 20 00 | Methyloxirane (propylene oxide) | 5% | 2.5% |
| 42. | 2918 15 30 | Bismuth citrate | 7.5% | Nil |
| 43. | 3102 30 00 | Ammonium nitrate, whether or not in aqueous solution | 10% | 5% |
| 44. | 3801 | Artificial Graphite; colloidal or semi-colloidal graphite; preparations based on graphite or other carbon in form of pastes, blocks, plates or other semi-
manufactures |
7.5% | 2.5% |
| 45. | 3808 93 30 | Gibberellic acid | 10% | 5% |
| 46. | 3904 | Polymers of vinyl chloride or of
other halogenated olefins, in primary forms |
10% | 7.5% |
| 47. | 4906 | Plans and drawings for architectural, engineering, industrial, commercial, topographical or similar purposes, being originals drawn by hand; hand-written texts; photographic reproductions on sensitised paper
and carbon copies of the foregoing |
10% | Nil |
| 48. | 5201 00 25 | Other cotton of staple length exceeding 32.0 mm | 5% | Nil |
| 49. | 7202 60 00 | Ferro-nickel | 2.5% | Nil |
| 50. | 7402 00 10 | Blister copper | 5% | Nil |
| 51. | 7802 | Lead waste and scrap | 5% | Nil |
| 52. | 7902 | Zinc waste and scrap | 5% | Nil |
| 53. | 8105 20 30 | Cobalt powders | 5% | Nil |
| 54. | 8419 89 12,
8419 89 13, 8419 89 14, 8419 89 15, 8419 89 16, 8419 89 17, 8419 89 19 |
Reactors, columns or towers or chemical storage tanks | 10% | 7.5% |
| NEW TARIFF LINES HAVE BEEN CREATED | ||||
| S. No. | Chapter/ heading/sub-heading/tariff
item mentioned in notification |
Commodity | New tariff item being created w.e.f.
01.05.2026 |
Rate of duty |
| (1) | (2) | (3) | (4) | (5) |
| 55. | 0306 19 00 | Krill, frozen | 0306 19 10 | 15% |
| 56. | 0802 99 00 | Pecan Nuts | 0802 99 10 | 30% |
| 57. | 0810 40 00 | Cranberries, fresh | 0810 40 10 | 10% |
| 58. | 0810 40 00 | Blueberries, fresh | 0810 40 20 | 10% |
| 59. | 0811 90 | Cranberries, frozen | 0811 90 11
0811 90 91 |
10% |
| 60. | 0811 90 | Blueberries, frozen | 0811 90 12
0811 90 92 |
10% |
| 61. | 0813 40 90 | Cranberries, dried | 0813 40 30 | 10% |
| 62. | 0813 40 90 | Blueberries, dried | 0813 40 40 | 10% |
| 63. | 1207 99 90 | Shea Nuts | 1207 99 50 | 15% |
| 64. | 2008 93 00 | Cranberries, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere
specified or included |
2008 93 10 | 5% |
| 65. | 2008 99 | Blueberries, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere
specified or included |
2008 99 15 | 10% |
| 66. | 2106 90 | Other than compound alcoholic preparations of a kind used for manufacture of beverages, of an alcoholic strength by volume exceeding 0.5% vol., determined at
20 degrees centigrade |
2106 90
(other than 2106 90 51) |
50% |
| 67. | 2202 99 | Cranberry products | 2202 99 21,
2202 99 31, 2202 99 91 |
10% |
| 68. | 2529 22 00 | Acid grade fluorspar containing by weight more than 97% of calcium
fluoride |
2529 22 10 | 2.5% |
| 69. | 2615 90 | Hafnium ores and concentrates | 2615 10 10 | Nil |
| 70. | 2841 | Ammonium metavanadate | 2841 90 10 | 2.5% |
| 71. | 29 | Gibberellic acid | 2932 20 40 | 5% |
| 72. | 29 | Triethyl orthoformate | 2915 90 96 | 5% |
| 73. | 29 | Diethyl malonate | 2917 19 22 | 5% |
| 74. | 29 | DL-2 Aminobutanol | 2922 19 30 | 5% |
| 75. | 29 | Aceto butyrolactone | 2932 20 50 | 5% |
| 76. | 29 | Artemisinin | 2932 99 30 | 5% |
| 77. | 29 | Thymidine | 2934 99 50 | 5% |
| 78. | 3302 10 | Mixtures of odoriferous substances of a kind used in food or drink industries other than compound alcoholic preparations of a kind used for manufacture of beverages, of an alcoholic strength by volume exceeding 0.5% vol., determined at 20 degrees centigrade | 3302 10 19,
3302 10 99 |
10% |
| 79. | 4104 11 00,
4104 19 00, 4105 10 00, 4106 21 00, 4106 31 00, 4106 91 00 |
Wet blue leather (hides and skin) | 4104 11 10,
4104 19 10, 4105 10 10, 4106 21 10, 4106 31 10, 4106 91 10 |
Nil |
| 80. | 4702 | Rayon grade wood pulp | 4702 00 10 | 2.5% |
| 81. | 4823 90 90 | All goods other than kites | 4823 90 90
(kites fall under new tariff item 4823 90 40) |
10% |
| 82. | 8101 99 90 | Tungsten (wolfram) bars and rods, other than those obtained simply by sintering, profiles, plates, sheets, strip and foil | 8101 99 20 | 5% |
| 83. | 8415 90 00 | All goods other than indoor or outdoor units of split-system air conditioner | 8415 90 90 | 10% |
| 84. | 8421 99 00 | All goods other than Reverse Osmosis (RO) membrane element for household type filters | 8421 99 90 | 7.5% |
| 85. | 8507 90 | Battery separators | 8507 90 20 | 5% |
| 86. | 8529 10 99,
8529 90 90 |
Parts suitable for use solely or principally with the apparatus of headings 8525, 8526 or 8527 | 8529 10 93,
8529 90 30 |
10% |
| 87. | 8609 00 00 | Refrigerated containers | 8609 00 10 | 5% |
a. In addition to the above, the First Schedule to the Customs Tariff Act, 1975 has also been amended to create new tariff items which will, inter-alia, help in better product identification; getting actual transaction data of precursor chemicals and help in their effective monitoring; facilitating, tracking exports and deciding policy measures for plant-based extract These changes will be effective from 1.05.2026, unless otherwise specified.
*****
(Author can be reached at info@a2ztaxcorp.com)
Author Bio
