The Customs Act, 1962 - Regulation of Imports/Exports

Legal Basis & Core Elements

• The Customs Act, 1962 consolidates and amends laws relating to customs in India.
• It applies across India (unless a specific provision limits it)
• Operated under the Central Board of Indirect Taxes & Customs (CBIC) (Ministry of Finance)
• It works in tandem with the Customs Tariff Act, 1975 (for duty rates), and various rules/regulations under the Act

Key powers granted include:

• Appointment & powers of customs officers (inspection, seizure, search)
• Designation of customs ports, airports, warehousing stations, land customs stations
• Prohibitions/restrictions on import/export of certain goods, and conditions for permits/licenses
• Valuation and assessment of goods, duty payment, refunds, penalties, appeals
• Recent proposals (Finance Bill 2025) aim to modernize: setting time limits for provisional assessments, enabling voluntary revision after clearance, abolishing the Settlement Commission, etc.

Registration/Where Customs Functions Operate

• When you import/export goods or deal across borders, you interact with and "register" through designated customs jurisdictions. There is no central "customs registry" for all goods; you engage via port or land customs stations.
• Customs ports/airports/land customs stations are notified under the Act.
• There are 122 notified Land Customs Stations (border crossings, river ports, and railway points).
• Major sea ports: India has 13 major ports and many minor ones.
• The ICEGATE portal is the online interface for electronic customs clearance.

To "register" your import/export activities you normally:

• Obtain/importer-exporter code (IEC) from DGFT (Directorate General of Foreign Trade)
• Use customs port jurisdiction where your goods arrive/depart
• File documents (Bill of Entry for imports, Shipping Bill/Bill of Export for exports)
• Use electronic clearance systems via ICEGATE or EDI

State/Port Variation Table (Selected Examples)

FAQs

1. What is the Customs Act, 1962?

The law regulating imports, exports, customs duties, and anti-smuggling measures in India.

2. Why does India use customs duties?

Revenue, protecting domestic industries, regulating trade practices.

3. Who collects customs duty?

CBIC via customs officers at ports, airports, border stations.

4. When is customs duty payable?

When goods enter India (import) or are exported (if required), subject to law.

5. How is duty calculated?

Based on classification, valuation rules (transaction value, etc.), and applicable rates (tariff).

6. Are all imports taxed?

No — some goods are exempt, under concession, or subject to conditional exemption.

7. What if duty is not paid/evaded?

Goods may be seized, penalties imposed, prosecution.

8. Can customs inspect my baggage?

Yes — if there is suspicion of restricted/prohibited or undeclared items.

9. What is "smuggling"?

Importing or exporting goods clandestinely to evade duty or bypass restrictions.

10. Can customs seize goods without notice?

Yes — if circumstances support suspicion of violation.

11. How to get my goods cleared by customs?

File Bill of Entry (imports) or Shipping Bill (exports), make duty payments, fulfill formalities.

12. What are prohibited goods?

Items absolutely barred from import/export — e.g. certain narcotics, counterfeit currency, goods contravening wildlife laws.

13. What are restricted goods?

Goods that require permits or authorisation (arms, certain chemicals, defense items).

14. Are there appeals?

Yes — to higher customs authorities and tribunals.

15. Penalty for smuggling?

Confiscation of goods, fines, imprisonment (varies by severity).

16. Does the Act cover e-commerce imports?

Yes — goods purchased online also fall under customs regulation.

17. Can I bring gold duty-free?

Up to permitted free allowance; excess is dutiable.

18. How is value determined?

Under Customs Valuation Rules based on transaction value, adjustments, etc.

19. Can customs check courier / postal items?

Yes — subject to legal thresholds and suspicion.

20. How to avoid customs issues?

Use proper documentation, full declaration, comply with permit/restriction laws.

21. What changes may come via the 2025 amendment?

Time-bound provisional assessments, voluntary revisions, removal of settlement commission, improved trade facilitation.