The Confederation of Indian Industry (CII) has urged the government to create a simpler, more predictable, and technology-led tax ecosystem ahead of the Union Budget 2026–27.
Following a meeting with Revenue Secretary Arvind Shrivastava, CII Director-General Chandrajit Banerjee said India’s next leap forward must be supported by “a tax system built on clarity, technology, and trust.”
Banerjee emphasized that while India has made strides through GST and faceless assessments, unresolved tax disputes and procedural complexity continue to burden businesses. “Over five lakh appeals, worth nearly ₹18 lakh crore, are still pending. That’s capital locked away from growth,” he said.
Reducing Litigation and Enhancing Transparency
To address the dispute backlog, CII recommended that cases involving over ₹100 crore be resolved within a year through virtual hearings monitored by the Central Board of Direct Taxes (CBDT). The chamber further proposed pausing penalty actions until appeals are concluded, and sharing draft orders with taxpayers for factual verification before finalization.
CII also called for reinstating the Authority for Advance Rulings (AAR) under retired high court judges, empowered to issue binding decisions within six months. This, it said, would reduce ambiguity and foster quicker resolution for complex tax questions.
Towards a Simplified TDS and TCS Framework
Terming the current Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) systems “overly complex and restrictive,” CII proposed consolidating 35 existing categories and multiple rates into just two or three uniform slabs.
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It further suggested eliminating TDS for transactions between GST-registered businesses and ensuring that GST components are excluded from TDS calculations. “The goal is not tax cuts but clarity,” Banerjee noted. “When compliance becomes intuitive, collection efficiency naturally rises.”
Digital Transformation of Tax and Customs Systems
CII urged the government to roll out API-based, fully paperless customs systems by 2028, including electronic adjudication, refunds, and appeals. It also called for a one-time indirect tax dispute settlement scheme and a multi-year corporate tax roadmap to give businesses long-term certainty.
Banerjee concluded, “India has proven that big reforms like GST 2.0 can succeed. If our tax ecosystem becomes as transparent as it is digital, we will not only collect taxes efficiently but also earn global trust in our governance model.”