Finance Minister Nirmala Sitharaman on Sunday announced in the Union Budget 2026–27 an extension of the basic customs duty exemption on capital goods used for manufacturing lithium-ion cells for battery storage in the next financial year.
“I propose to extend the basic customs duty exemption given to capital goods used for manufacturing lithium-ion cells for batteries to those used for manufacturing lithium-ion cells for battery energy storage systems also,” Sitharaman said.
Simplifying tariff structure and promoting domestic manufacturing
The Budget proposals for Customs and Central Excise aim to simplify the tariff structure, support domestic manufacturing, promote export competitiveness, and correct duty inversion, the Finance Minister explained in Parliament.
To streamline long-standing customs duty exemptions, the Budget proposes removal of certain exemptions on items manufactured in India or with negligible imports. Additionally, effective rates for various items will be incorporated into the customs notifications and tariff schedule to simplify the process of determining applicable duties.
Tax holiday till 2047 for cloud services companies
In a major initiative for the technology sector, Finance Minister Sitharaman proposed a tax holiday until 2047 for foreign companies providing cloud services to global customers using Indian data centres.
“I propose to provide tax holiday till 2047 to any foreign company that provides cloud services to customers globally by using data centre services from India,” she said.
Conditions for availing tax holiday
The tax holiday will be extended to eligible entities subject to certain conditions. Companies must provide services to Indian customers through an Indian reseller entity to avail of the benefit.
The move is intended to enable critical infrastructure, boost investment in data centres, and further strengthen India’s cloud services ecosystem.
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