UPSC Prelims Practice Questions — BUDGET PROPOSALS FOR CUSTOMS AND CENTRAL EXCISE AIM TO FURTHER SIMPLIFY TARIFF STRUCTURE, SUPPORT DOMESTIC MANUFACTURING: UNION FINANCE MINISTER

Q1. Under which one of the following provisions are exemption notifications for customs duty (including the Budget 2026-27 sectoral exemptions) issued?

  • A. Section 25(1) of the Customs Act, 1962
  • B. Section 11 of the Customs Act, 1962
  • C. Section 3 of the Customs Tariff Act, 1975
  • D. Section 5A of the Central Excise Act, 1944

Q2. In which one of the following Union Budgets was a comprehensive review of the customs duty rate structure first announced, setting the direction for subsequent tariff rationalisation?

  • A. Union Budget 2024-25
  • B. Union Budget 2025-26
  • C. Union Budget 2026-27
  • D. Union Budget 2023-24

Q3. The levy and collection of customs duty, and administration of the customs exemptions announced in the Budget, fall within the purview of which one of the following?

  • A. Central Board of Indirect Taxes and Customs (CBIC), under the Department of Revenue, Ministry of Finance
  • B. Central Board of Direct Taxes (CBDT), under the Department of Revenue, Ministry of Finance
  • C. Directorate General of Foreign Trade (DGFT), under the Ministry of Commerce and Industry
  • D. Department of Economic Affairs, Ministry of Finance

Q4. Apart from its Chairman, how many Members does the Central Board of Indirect Taxes and Customs (CBIC) have?

  • A. Six
  • B. Four
  • C. Eight
  • D. Two

Q5. Under the Budget 2026-27 SEZ-to-DTA concessional clearance window, the quantity of goods an eligible SEZ unit may clear at concessional duty is capped at what percentage of its highest annual FOB export value of the three immediately preceding financial years?

  • A. 30 per cent
  • B. 15 per cent
  • C. 50 per cent
  • D. 25 per cent

Q6. In the Budget 2026-27 SEZ-to-DTA concessional clearance mechanism, the 30 per cent ceiling is computed with reference to which one of the following bases?

  • A. The highest annual FOB export value achieved by the unit in any of the three immediately preceding financial years
  • B. The total FOB export value of all of the unit's preceding financial years combined
  • C. The FOB export value of the immediately preceding financial year only
  • D. The average FOB export value of the unit over the last five financial years

Q7. The correction of the inverted duty structure on imported inputs, effected through customs exemption notifications in the Budget, is operationalised by which one of the following?

  • A. The Central Board of Indirect Taxes and Customs, through notifications under the Customs Act, 1962
  • B. The GST Council, which alone can correct any inverted duty structure in the economy
  • C. The Directorate General of Foreign Trade, under the Ministry of Commerce and Industry
  • D. NITI Aayog, through its trade policy recommendations

Q8. The Basic Customs Duty exemptions announced in Budget 2026-27 for sectors such as shipbuilding, aviation and Battery Energy Storage Systems are given legal effect through exemption notifications issued by which one of the following?

  • A. Central Board of Indirect Taxes and Customs (CBIC)
  • B. Directorate of Revenue Intelligence (DRI)
  • C. Directorate General of Foreign Trade (DGFT)
  • D. Central Board of Direct Taxes (CBDT)