FinMin Reshapes Import Duty Exemptions, Removes Lapsed Benefits, Resets Sunset Dates

The Ministry of Finance has reshaped the import duty exemptions, removed lapsed benefits, reset the sunset dates.

The Central Government has issued Notification No. 02/2026-Customs, substantially amending Notification No. 45/2025-Customs dated 24 October 2025.

The changes, notified in the Gazette of India (Extraordinary), are aimed at pruning sunset-expired exemptions, extending select concessions up to 31 March 2028, and realigning the concessional duty framework with evolving industrial and trade priorities.

The notification has been issued under Section 25(1) of the Customs Act, 1962, read with Section 3(12) of the Customs Tariff Act, 1975, empowering the government to grant or modify exemptions in public interest. The stated intent is to recalibrate the existing exemption structure by removing redundant entries and extending benefits considered strategically important.

One of the most significant aspects of Notification No. 02/2026-Customs is the mass deletion of numerous serial numbers from Table I of the parent notification. A substantial number of entries have been omitted with effect from 1 May 2026, while some deletions take effect from 1 April 2026. These removals signal the government’s decision to allow several temporary or transitional duty concessions to lapse as scheduled.

Extension of Sunset Dates to March 2028

For several continuing exemptions, the government has extended the sunset clause from 31 March 2026 to 31 March 2028. This extension applies to a wide range of goods and sectors, providing long-term certainty to importers and manufacturers who rely on concessional customs duties for production planning and cost management.

New Insertions Supporting Strategic Sectors

The notification also introduces new tariff entries, including exemptions for:

Monazite (HS 2612 20 00), a mineral of strategic importance;
Sodium antimonate used in solar glass manufacturing;
Rare earth metals and their inorganic or organic compounds;
Inputs used in the manufacture of solar photovoltaic modules, such as EVA and POE encapsulants.

These insertions reflect the government’s continued emphasis on renewable energy, advanced manufacturing, and critical minerals, aligning customs policy with domestic manufacturing and clean-energy goals.

Sector-Specific Rationalisation

Special provisions have been retained—though with a defined sunset of 31 March 2028—for imports by bona fide exporters, including goods used in the manufacture of leather and synthetic footwear, as well as components used for export-oriented production. At the same time, several sector-specific concessions have been withdrawn, indicating a shift from blanket exemptions to targeted, time-bound incentives.

Effective Dates and Transitional Impact

While the notification itself comes into force on 1 February 2026, the amendments operate on staggered timelines—1 April 2026 and 1 May 2026—depending on the specific serial number concerned. Importers will therefore need to carefully reassess eligibility and pricing structures in light of these phased changes.

Notification Details

Notification No. 02/2026-Customs

Date: 01/02/2026

Click Here To Read Notification