ASSOCHAM seeks tax relief and customs dispute amnesty scheme ahead of Budget 2027-28

Industry body ASSOCHAM has submitted its pre-Budget memorandum to the government ahead of the Union Budget 2027-28. It makes several key recommendations for reform of both direct and indirect taxes. ASSOCHAM wants a tax regime that is transparent, predictable and conducive to investment. The body says this would speed up India's economic growth, strengthen domestic manufacturing, draw global investment and improve ease of doing business.

The recommendations aim to stabilise the tax environment, reduce legal disputes, simplify tax provisions and strengthen India's competitiveness as a hub for global investment and manufacturing.

On direct taxes, ASSOCHAM first raises the matter of new manufacturing companies. It has recommended a concessional tax rate for all new manufacturing companies, including those in strategic sectors such as defence. It has also suggested reintroducing a long-term tax exemption scheme, on the lines of Section 115BAB of the Income Tax Act, 1961, with reasonable conditions. The aim is to encourage long-term investment, create jobs and boost exports.

Given the growing importance of digital infrastructure, it has sought a separate asset category and accelerated depreciation for data centre buildings, fibre optic, cooling systems and energy-efficient 5G infrastructure. It has also asked for clarity on tax certainty provisions for foreign companies that provide digital content and cloud services through Indian reseller entities.

To promote research and development, ASSOCHAM has proposed stronger collaboration between industry and academia. This includes allowing a full or weighted deduction on expenditure incurred with recognised universities and research institutions.

To encourage long-term investment, ASSOCHAM has called for simplifying long-term capital gains tax (LTCG) on listed securities. It recommends that LTCG be 10% on securities held for 1 to 2 years, and zero or 5% on those held for more than 2 years. As an alternative, it has also proposed giving credit for securities transaction tax on long-term securities.

To make tax administration transparent, ASSOCHAM has sought reform of the minimum alternate tax regime. It wants the limit for the dispute resolution committee raised from Rs 10 lakh to Rs 10 crore. It also wants the Advance Ruling Board reconstituted so that it delivers decisions within a fixed time.

On indirect taxes, ASSOCHAM has recommended a one-time customs dispute resolution (amnesty) scheme to settle stuck customs disputes worth about Rs 1.5 lakh crore. It proposes waiving interest and penalty and giving a phased concession on the basic duty.

It has also asked for a permanent and simpler framework for units in special economic zones to sell their goods in the domestic tariff area. Flexibility in warehouse rules and a simpler Authorised Economic Operator programme are also among its demands.

ASSOCHAM says its recommendations underline the importance of balancing tax revenue with ease of investment. The body believes a simple, stable and transparent tax system will support India's economic aspirations, strengthen production capacity and play a key role in realising the dream of Viksit Bharat.