Regulations 1-5 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Regulations 1 to 5 of the Handling of Cargo in Customs Areas Regulations, 2009 (HCCAR 2009) say where the regulations apply, how they treat providers already approved, and what a Customs Cargo Service provider (a port, airport, ICD or CFS operator and similar custodian) must provide before it can be approved: infrastructure, insurance, a bond, an undertaking on the cost of Customs officers and an indemnity.
The regulations apply to handling of imported and export goods in ports, airports, inland container depots, land customs stations and customs areas approved or specified under section 8. A provider must meet the conditions in regulation 5: infrastructure and insurance, a bond for the average duty on imported goods and ten per cent of the value of export goods likely to be stored during a period of five days, and an indemnity. After Notification No. 75/2024 the bond period reads five days.
Position of the text: as amended up to Notification No. 75/2024-Customs (N.T.) dated 7 November 2024. Later notifications should be checked; no official consolidated text exists. One point needs care: the CBIC base text still shows "thirty" days in regulation 5(3), but Notification No. 115/2016 had already made it "ten", and Notification No. 75/2024 made it "five". The notification says only that for the word "ten" the word "five" is substituted, without saying which "ten", so the consolidated reading applies it to the storage period. Check the current text before relying on the bond figure.
The regulations were made by Notification No. 26/2009-Customs (N.T.) dated 17 March 2009 under section 141(2) read with section 157 of the Customs Act, 1962. For the Act's custody provisions, see sections 44 and 45 of the Customs Act, 1962 and sections 141, 144 and 145. Operators checking their facilities against these conditions can use our compliance advisory service.
Regulation 1: title and commencement
The regulations come into force on the date of their publication in the Official Gazette (regulation 1(2)).
Regulation 2: definitions
"Customs Cargo Services provider" means any person responsible for receipt, storage, delivery, dispatch or otherwise handling of imported and export goods, and includes a custodian referred to in section 45 of the Act and persons referred to in section 141(2). "Specified" means specified by a notification or an order under the Act. Words defined in the Act have the Act's meanings. The definition is functional: if you receive, store, deliver, dispatch or handle imported or export goods in a customs area, you are within it.
Regulation 3: application
The regulations apply to the handling of imported and export goods in ports, airports, inland container depots, land customs stations and in customs areas approved or specified under section 8 of the Act.
Regulation 4: retrospective application
Any action taken or anything done in respect of the appointment of Customs Cargo Service providers immediately before the regulations came into force is deemed to have been done under the corresponding provisions of the regulations. Providers already approved on or before the commencement date had to comply with the regulations' conditions within three months, or within such period not exceeding one year as the Principal Commissioner or Commissioner of Customs allowed, from the commencement date. These are old transitional rules, kept for history.
Regulation 5: conditions to be fulfilled
A provider for custody and handling of imported or export goods in a customs area fulfils six sets of conditions. The first has three parts.
Regulation 5(1): infrastructure, premises and insurance
To the satisfaction of the Principal Commissioner or Commissioner of Customs, the provider furnishes:
| Item | What it covers |
|---|---|
| (i) Infrastructure, equipment and adequate manpower | For loading, unloading, stacking, handling, stuffing and de-stuffing of containers, storage, dispatch and delivery of containers and cargo, including the items (a) to (o) below |
| (ii) Premises | Safe, secure and spacious premises for loading, unloading, handling and storing of cargo for the projected capacity and for examination and other operations required by any law in force |
| (iii) Insurance | For an amount equal to the average value of goods likely to be stored in the customs area based on the projected capacity, and for an amount the Commissioner may specify having regard to goods already insured by importers or exporters |
The infrastructure list in 5(1)(i) is: (a) standard pavement for heavy duty equipment in the operational and stacking area; (b) fully furnished office accommodation for Customs and the Customs EDI Service Centre, with amenities, and residential accommodation and transport for customs staff, all provided at no cost or rent; (c) premises for user agencies with basic amenities; (d) separate storage for imported, export and transhipment goods; (e) a gate complex with separate entry and exit; (f) adequate parking space for vehicles; (g) a boundary wall; (h) internal service roads; (i) an electronic weigh-bridge and other weighing and measuring devices; (j) a computerised system for location and accountal of goods and processing of documents; (k) adequate air-conditioned space, power back-up, hardware, networking and other equipment for secure connectivity with the Customs automated system and exchange of information between Customs community partners; (l) facilities for auction, including e-auction, for disposal of uncleared, unclaimed or abandoned cargo; (m) facilities for installation of scanning equipment; (n) security and access control to prohibit unauthorised access; and (o) such other equipment or facilities as the Board or the Commissioner may specify having regard to screening, examination, custody and handling of goods.
Regulation 5(2): cost of Customs officers
The provider undertakes to bear the cost of the Customs officers posted at the customs area, on a cost recovery basis, and to make payments at such rates and in such manner as prescribed, unless specifically exempted by an order of the Government of India in the Ministry of Finance. The text prints no rate.
Regulation 5(3): the bond for stored goods
The provider executes a bond equal to the average amount of duty involved on the imported goods and ten per cent of the value of export goods likely to be stored in the customs area during a period of five days, and furnishes a bank guarantee or cash deposit equivalent to ten per cent of such duty.
A proviso (inserted in 2012 and carried forward) says the bank guarantee or cash deposit condition does not apply to ports notified under the Major Port Authorities Act, to the Central Government or State Governments or their undertakings, or to a Customs Cargo Service provider authorised under the Authorised Economic Operator Programme.
The figure has moved. The original period was thirty days; Notification No. 115/2016 made it ten; and Notification No. 75/2024 made it five. The text of regulation 5(3) also contains "ten per cent" twice, and those figures were not changed.
Regulation 5(4): separate bond for goods moving between customs areas
The provider executes a separate bond for an amount equal to ten per cent of the value of export goods, with a bank guarantee equal to ten per cent of the value of the bond, for export goods transported from the customs area to another customs area for export or transhipment. The same exemption proviso applies.
Regulation 5(5) and 5(6)
Regulation 5(5) is an undertaking to comply with the Act and the rules, regulations, notifications and orders under it. Regulation 5(6) is an undertaking to indemnify the Commissioner against any liability arising from damage caused or loss suffered on imported or export goods, due to accident, damage, deterioration, destruction or any other unnatural cause during receipt, storage, delivery, dispatch or other handling.
A worked example
Gateway Logistics Park plans to operate an inland container depot. Before approval it shows the Commissioner the weigh-bridge, scanning space, separate storage areas, gate complex and computerised location system, with insurance for the average value of goods likely to be stored. It executes the regulation 5(3) bond for the average duty on imported goods and ten per cent of the value of export goods likely to be stored during five days, plus a bank guarantee or cash deposit of ten per cent of that duty. Had Gateway been authorised under the AEO Programme, the guarantee or deposit condition would not apply.
Need help meeting the custodian conditions?
If you are setting up or renewing a port, ICD, CFS or air cargo facility and need to check the infrastructure, insurance and bond conditions in regulation 5, our compliance advisory team can map each condition to your facility.
Key takeaways
- The HCCAR 2009 apply to ports, airports, ICDs, land customs stations and customs areas approved or specified under section 8.
- A Customs Cargo Service provider is anyone who receives, stores, delivers, dispatches or handles imported or export goods, including section 45 custodians.
- Regulation 5 sets infrastructure, premises, insurance, a cost-recovery undertaking, bonds, an AEO and port exemption from the bank guarantee, an undertaking to comply and an indemnity.
- The regulation 5(3) bond period reads five days after Notification No. 75/2024; the CBIC base text still shows thirty.
Read next
- Regulations 6-8 of the Handling of Cargo in Customs Areas Regulations, 2009: responsibilities, relaxation and commencement
- Regulations 9-13 of the Handling of Cargo in Customs Areas Regulations, 2009: approval, AEO validity, suspension and renewal
- Sections 44 and 45 of the Customs Act, 1962: custody and removal of imported goods in a customs area
- Sections 141, 144 and 145 of the Customs Act, 1962: control in a customs area, samples and owner operations
Disclaimer: Based on the customs regulations named above as published on the CBIC Tax Information Portal or in the Gazette and, for sets amended since 2023, the amending notifications (read through a TaxClue consolidated reading text; no official consolidated text exists), as consulted on 3 October 2026. Later notifications, fees and the Customs Act, 1962 provisions referred to should be checked. This article is general information, not legal advice; check the official text before acting.