New Delhi

The government has projected a modest 5 per cent growth in customs revenue for FY2026-27 after factoring in the impact of free trade agreements, duty exemptions on capital goods and a tapering of edible oil imports, CBIC Chairman Vivek Chaturvedi said on Monday.

In a post-Budget interview to PTI, Chaturvedi said Goods and Services Tax (GST) revenues in FY27 are estimated to grow 6.3 per cent, with a buoyancy of 0.94, even after a reduction in tax rates on about 375 items effective September 22, 2025.

“The tax revenue targets for FY27 are realistic and achievable,” the CBIC chief said.

The Union Budget has projected customs revenue of Rs 2.71 lakh crore for FY27, reflecting a 5 per cent year-on-year growth. GST collections are estimated at Rs 10.19 lakh crore, a 6.3 per cent rise year-on-year, after excluding the compensation cess, which ended in January.

Explaining the conservative customs projections, Chaturvedi said an expected increase in free trade agreements (FTAs) would lead to greater use of preferential tariffs instead of Most Favoured Nation (MFN) rates, resulting in lower duty collections.

He also pointed out that customs duty exemptions on capital goods imports, announced in the FY27 Budget to boost domestic manufacturing and schemes such as PLI, could further impact revenues.

In addition, the tapering of edible oil imports, which had surged during the first half of the current fiscal, is likely to reduce customs collections.

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“These are the reasons why we have been very conservative in our growth projections over the revised estimates of FY26,” Chaturvedi said.