- By Shubham Bajpai
- Sat, 06 Dec 2025 02:36 PM (IST)
- Source:JND
Niramala Sitharaman, Minister of Finance and Corporate Affairs, on Saturday said that a complete overhaul of the customs system would be her next major assignment as part of broader reformist efforts for the economy.
Sitharaman, while speaking at the HT Leadership Summit, noted the need to simplify customs rules. She added that "we need to make them more transparent."
She said, "There are quite a few things to do but what's on the card and it's not a secret that I'm letting out before the budget but is the complete overall of the customs area. We need to have customs a lot more simplified for people to feel that it is not too tiresome, cumbersome for them to comply with the expectations and the rules to make it more transparent."
"And we are normally in some sort of alignment with the World Customs Organisation. So every standard that they peg for us and for the world, we normally comply and keep to that benchmark," the Minister added.
What is customs?
Customs refers to the authority that is responsible for collecting tariffs and regulating the movement of goods into and out of a country.
Tracing her government's past efforts, she added that the government has steadily reduced customs duties over the last two years.
Sitharaman further added, "We have brought down customs duties over the last two years, steadily. But in those few items where we are still considered to be over the optimal rate, we will have to bring them down as well. So customs is my next big cleaning-up assignment."
Income tax reforms
Drawing a parallel to past reforms like the income tax system, Sitharaman said that it had once suffered from the same problems, where the rates themselves were not the main issue, but the administration was.
She recalled how this had even led to the term "tax terrorism." She said she was determined to erase that label.
She listed significant reforms to the income tax system, such as faceless assessments, which had already made the income tax process cleaner and less intimidating. She added that similar virtues are now needed to be brought to customs.
"If I can just go back to the income tax act for a minute. The commentary used to be that income tax rates are not the problem. Yes, we want lower and lower and lower rates, but it is the tax administration that causes the problem. It's the tax administration which becomes painful, sometimes agonising, and therefore the not so nice coinage resulted in tax terrorism," she added.
Challenges in customs overhaul
However, she also cautioned about the challenges: Streamlining the customs process and still guarding against illicit and contraband goods.
She wondered aloud whether the system could rely more on comprehensive scanning and minimise direct contact between cargo and customs officials, thereby reducing discretion and increasing trust.
(With ANI Inputs)