The Ministry of Finance has invited suggestions from trade and industry bodies regarding tax rate changes, duty structure revisions and measures to simplify compliance for consideration in the upcoming Union Budget 2026-27, which will be presented on February 1, 2026.
In its customary pre-Budget exercise, the Revenue Department's Tax Research Unit (TRU) has issued a communication seeking detailed proposals by November 10, 2025. The suggestions are expected to cover both direct and indirect taxes, with a clear economic justification, supporting data and statistical analysis.
According to the ministry's note, stakeholders may propose modifications in the duty structure, tax rates, and measures for broadening the tax base, along with steps that can enhance ease of doing business and compliance efficiency.
"Your suggestions and views may be supplemented and justified by relevant statistical information about production, prices, revenue implications of the changes suggested, and any other data to support your proposal," the communication stated.
Focus on Rationalisation and Simplification
The Finance Ministry reiterated that the government's medium-term policy aims to phase out tax exemptions, deductions, and incentives, while rationalising tax rates to ensure a simpler and more transparent tax regime.
Industry associations have also been asked to highlight and quantify the positive externalities-such as employment generation, investment stimulation, or productivity gains-arising from their direct tax proposals.
Correction of Inverted Duty Structure
For indirect taxes, the ministry has invited inputs on inverted duty structure corrections, where tax rates on inputs exceed those on finished goods, leading to working capital blockages for manufacturers. The TRU has asked that such representations be backed with data on value addition at each stage of production.
A Collaborative Approach to Budget-Making
The annual call for suggestions reflects the government's collaborative and consultative approach to budget formulation. By inviting industry feedback, the Finance Ministry aims to align tax policies with current business realities, global trade dynamics, and the goal of boosting 'Viksit Bharat @2047'-India's long-term economic vision.
With Budget 2026-27 expected to build on the government's fiscal consolidation and growth roadmap, industry experts anticipate that this consultation process could shape key policy measures aimed at improving tax compliance, enhancing ease of business, and supporting domestic manufacturing.
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