Sections 1 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.
Section 1 gives the Act its name, says where it applies and leaves the start date to a notification. Section 2 then defines the places that matter every day in customs work: India, Indian customs waters, customs ports and airports, customs areas and customs stations.
This article follows the text on the CBIC portal updated to 30 March 2022 (the Act as amended up to the Finance Act, 2022), and then adds the changes made to sections 1 and 2 by the Finance Act, 2026. The Finance Act, 2023 could not be checked in full; see the section on later Finance Acts below.
The Act extends to the whole of India, also to fishing and fishing related activities by Indian-flagged fishing vessels beyond the territorial waters of India (added by the Finance Act, 2026), and, save as otherwise provided in the Act, also reaches an offence or contravention committed outside India by any person. It came into force on a date fixed by notification. Section 2 defines India to include the territorial waters, and Indian customs waters to run up to the limit of the Exclusive Economic Zone. Goods are dealt with under the Act at a customs station, which can be a port, an airport, a land customs station, an international courier terminal or a foreign post office.
Section 1: name, extent and commencement
Sub-section (1) says the Act may be called the Customs Act, 1962. Sub-section (2) says it extends to the whole of India and, save as otherwise provided in the Act, it applies also to any offence or contravention under it committed outside India by any person. Since the Finance Act, 2026, the words "whole of India" in sub-section (2) are followed by the words ", fishing and fishing related activities by Indian-flagged fishing vessels beyond territorial waters of India", so the extent clause now names that activity as well. The matching special provision is section 56A; see our article on section 56A, fish harvested by Indian-flagged fishing vessels beyond territorial waters.
The second half of sub-section (2) is a later addition. The footnote in the copy shows it was inserted by section 57 of the Finance Act, 2018 (13 of 2018), with effect from 29 March 2018. Practically, it means that a person located abroad, such as a foreign supplier or a foreign agent who takes part in a contravention, is not placed outside the Act merely by sitting outside India. The words "save as otherwise provided in this Act" matter: other provisions of the Act can cut this reach down, so the sub-section does not settle by itself whether a particular act abroad is caught. If a cross-border arrangement of yours raises that question, take legal advice on the specific provision before you proceed.
Two footnotes sit against the words "the whole of India". One records that the Act was extended to Sikkim with effect from 1 October 1979. The other records that this Act and the Customs Tariff Act, 1975 have been extended, for certain purposes, to the whole of the Exclusive Economic Zone and Continental Shelf of India. These are notes in the copy; the section text itself only says "the whole of India".
Sub-section (3) leaves the commencement to the Central Government, which was to appoint the date by notification in the Official Gazette. The footnote in the copy states that the Act was brought into force with effect from 1 February 1963.
Section 2: the territorial definitions
Section 2 begins "In this Act, unless the context otherwise requires". The clauses below are the ones that fix the geography of customs. If you want the other definitions, read our sibling articles on officers, authorities, importer and exporter and on goods, import, export and prohibited goods.
| Clause | Term | What the text says |
|---|---|---|
| (27) | India | Includes the territorial waters of India |
| (28) | Indian Customs Waters | The waters extending into the sea up to the limit of the Exclusive Economic Zone under section 7 of the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976 (80 of 1976), and includes any bay, gulf, harbour, creek or tidal river |
| (10) | Customs airport | Any airport appointed under clause (a) of section 7 to be a customs airport, and includes a place appointed under clause (aa) of that section to be an air freight station |
| (12) | Customs port | Any port appointed under clause (a) of section 7 to be a customs port, and includes a place appointed under clause (aa) of that section to be an inland container depot |
| (29) | Land customs station | Any place appointed under clause (b) of section 7 to be a land customs station |
| (20A) | Foreign post office | Any post office appointed under clause (e) of sub-section (1) of section 7 to be a foreign post office |
| (28A) | Indian-flagged fishing vessel (new, Finance Act, 2026) | A vessel which is used or intended to be used for the purpose of fishing in the seas and entitled to fly the flag of India |
| (28B) | International courier terminal (renumbered from (28A), Finance Act, 2026) | Any place appointed under clause (f) of sub-section (1) of section 7 to be an international courier terminal |
| (13) | Customs station | Any customs port, customs airport, international courier terminal, foreign post office or land customs station |
| (11) | Customs area | The area of a customs station or a warehouse, and includes any area in which imported goods or export goods are ordinarily kept before clearance by Customs Authorities |
How the pieces fit together
The definitions work in layers. Section 7 lets the Board appoint, by notification, the ports, airports, inland container depots, air freight stations, land customs stations, foreign post offices and international courier terminals. Section 2 then gives each appointed place its label, and clause (13) gathers most of them under the single phrase "customs station". Clause (11) then draws the "customs area" around a customs station or a warehouse. Our article on sections 7 to 10 explains the appointment power itself.
Why does this matter in practice? Goods are brought in and cleared at appointed places. A customs area is not only the pier or the terminal building; it includes any area in which imported or export goods are ordinarily kept before clearance. The test in the text is whether the area is one in which such goods are ordinarily kept before clearance, so the label an owner gives the place is not the deciding point.
For the wider picture of how the Act is organised, see our introduction to the Customs Act, 1962. If you want to see how "goods", "import" and "export" tie to these places, our post on key definitions under the Customs Act is a good companion.
Reading "India" and "Indian customs waters" together
Clause (27) pulls the territorial waters into "India". Clause (28) goes further out to sea: the Indian customs waters stretch up to the limit of the Exclusive Economic Zone, and the clause adds, for the avoidance of doubt, any bay, gulf, harbour, creek or tidal river. The two clauses do different jobs. "India" fixes what counts as inside the country for import and export (taking goods out of India, or bringing them into India). "Indian customs waters" is the wider sea area for which the Act is written to operate against vessels and goods. The text of clause (28) points to section 7 of the 1976 Act for the limit; it does not restate the distance, and this article does not either.
An example with invented names. A cargo vessel owned by Meridian Marine Ltd carries consignments for Kalyani Textiles Pvt. Ltd. and discharges at an appointed customs port. The port is a customs port because it was appointed under section 7; the quay and the transit sheds near it form part of the customs area; and the whole station is a customs station. If instead the cargo arrives by road at a notified border post, the same label logic applies, with that place being a land customs station under clause (29).
A note on the printing in the copy
Clause (7B) and some other clauses of section 2 are printed with small slips in the copy (for example "ofCustoms" in clause (7A)). Those are printing slips and do not affect the clauses covered here. Clause (45), the old definition of a warehousing station, appears as an omitted clause in the copy, and section 9 on warehousing stations is likewise omitted. The text consulted for this article shows them as omitted.
Changes made by later Finance Acts
| Finance Act | What changed | What the gazette prints about commencement |
|---|---|---|
| Finance Act, 2026 (No. 4 of 2026), section 145 | Section 1(2): after "whole of India", the words ", fishing and fishing related activities by Indian-flagged fishing vessels beyond territorial waters of India" are inserted | No date is printed in the clause. The Act received the assent of the President on 30 March 2026 |
| Finance Act, 2026, section 146 | Section 2: existing clause (28A) (international courier terminal) is renumbered (28B); new clause (28A) defines "Indian-flagged fishing vessel" | No date is printed in the clause. Assent on 30 March 2026 |
The Finance Act, 2023 amendments to the Customs Act could not be checked in full, because only an extract of that Act was available. Check the current text on the CBIC portal before relying on any clause of sections 1 and 2.
Need help with Customs Act questions?
If you are unsure whether a particular location, shipment or foreign counterparty is caught by the Act, a short legal consultation can help you read the provisions against your facts before you decide what to do.
Key takeaways
- Section 1 names the Act, extends it to the whole of India and, save as otherwise provided, to offences or contraventions committed outside India by any person.
- Since the Finance Act, 2026, section 1(2) also names fishing and fishing related activities by Indian-flagged fishing vessels beyond territorial waters of India, and section 2(28A) defines "Indian-flagged fishing vessel"; the courier terminal definition is now clause (28B).
- The Act was brought into force from 1 February 1963, as the footnote in the copy records.
- "India" includes the territorial waters; "Indian customs waters" run up to the limit of the Exclusive Economic Zone and include any bay, gulf, harbour, creek or tidal river.
- Customs ports, airports, land customs stations, foreign post offices and international courier terminals are all appointed places; clause (13) groups most of them as customs stations.
- A customs area includes any area in which imported or export goods are ordinarily kept before clearance.
Read next
- Introduction to Customs Act 1962
- Key Definitions Under Customs Act: Goods, Import, Export
- Sections 7 to 10: customs ports, airports and land customs stations
- Section 2: definitions of officers, authorities, importer and exporter
Disclaimer: Based on the Customs Act, 1962 as published on the CBIC Tax Information Portal, updated to 30 March 2022 (amended up to the Finance Act, 2022), as consulted on 2 October 2026. The changes made by the Finance Act, 2026 to sections 1 and 2 are added from its gazette text; the Finance Act, 2023 could not be checked in full, and the current rules, regulations and notifications should be checked. This article is general information, not legal advice; check the official text before acting.