Customs is an authority or agency in a country responsible for collecting tariffs and for controlling the flow of goods, including animals, transports, personal effects, and hazardous items, into and out of a country.

Each country has its own laws and regulations for the import and export of goods into and out of a country, which its customs authority enforces. The import or export of some goods may be restricted or forbidden. A customs duty is a tariff or tax on the importation (usually) or exportation (unusually) of goods. Commercial goods not yet cleared through customs are held in a customs area, often called a bonded store, until processed. All authorized ports are recognized customs areas.

Customs Act is used to

  • Regulate Imports & Exports
  • Protect Indian Industry from dumping
  • Collect revenue of Customs duty

Some of the important provisions of the Customs Act, 1962 related to exports & imports:

Section 2(14) – Dutiable Goods:
This section defines “dutiable goods” as any goods which are chargeable to duty and on which duty has been paid.

Section 2(15) – Duty:
As per this section, “duty” means a duty of Customs leviable under the Customs Act.

Section 2(19) – Export Goods
As per section 2(19) of Customs Act “Export goods” means any goods which are to be taken out of India to a place outside India. Goods brought near customs area for export purpose will be “Export goods”

Section 2(22) – Definition of Goods:
This section gives an inclusive definition of goods. Goods includes (a), vessels, aircraft and vehicles (b) stores (c) baggage (d) currency & negotiable instruments & (e) any kind of movable property.

Section 2(25) – Imported Goods:
It defines “imported goods” as any goods brought in India from a place outside India, but does not include goods which have been cleared for “home consumptions.

Section 2(31) – Person in charge of conveyance:
As per section 2(31), “person-in-charge” means (a) in case of vessel – its Master (b) in case of aircraft – its pilot – in-charge.

Section 7 – Customs Port:
Section 7 empowers CBEC (Customs Boards Of Excise & Customs) to appoint Customs ports, airports, places for Inland Container Depots (ICDs) and coastal ports.

Section 12 – Customs duty on goods:
As per this section, “Customs duty is on goods”. The duty is payable on goods belonging to the Government as well as goods not belonging to the Government.

Section 12 (1) – Levy of duty on Imports as well as Exports:
This is the charging section which provides for duty on imports as well as on exports. The rate of duty is prescribed in the Customs Tariff Act, 1975 read with the relevant exemption notifications.

Section 12 (2) – Customs duty payable by Government:
This section makes it clear that Customs duty is payable by the Govt also. Thus, there is no general exemption for goods imported by the Govt.

Section 14 (1) – Customs value:
It is the Value normally used for calculating Customs duty payable (Called as “Customs Value” or Assessable Value”)

Section 31 (1) – IGM:
IGM (Import General Manifest) should be filed before the arrival of the ship or aircraft.

Section 31 (2) – Entry Inward:
Unloading of cargo can start after Customs officer grants “Entry Inward”.

Section 32 – Unloading of reported goods only is permissible:
Only those goods mentioned in the import manifest can be unloaded.

Section 45 – Custody of goods:
Goods imported will remain in the custody of a person, approved by the Commissioner of Customs till they are cleared for home consumption or warehoused or transhipped by the importer. At major ports, Port Trust Authority have been approved as the Custodian.

Section 46 – Presentation of Bill of entry:
It is a must for clearance of imported goods except in the case of transit or transhipment goods.

Section 47 – Clearance of Imported goods:
Clearance of home consumption is permitted by the proper officer after satisfying himself that the goods are not prohibited and the importer has paid the duty assessed on the goods. If duty is not paid within five days excluding holidays then this section provides for the payment of Interest.

Section 48 – Sale of un-cleared goods:
The custodian can sell the goods imported if the importer does not clear the same within 30 days of import.

Section 50 – Presentation of Shipping Bill:
It has to be filed for the clearance of export goods.

Section 51 –
Permission to export is given after assessment of the goods

Section 79 – Baggage:
The Baggage Rules permits bringing in goods up to a certain value.

Section 156 – Rules under Customs Act:
Under Section 156, Central Government has been empowered to make Rules consistent with provisions of the Act to carry out the purpose of the Act. Various rules have been framed under these powers. (Note: Rules have to be placed before the Parliament).

Section 157 – Regulations under Customs Act:
Under Section 157, CBEC has been empowered to make regulations consistent with provisions of the Act to carry out the purposes of the Act. Various Regulations have been framed under these powers. (Note: Regulations framed by CBEC are not required to be placed before the Parliament)