Section 2 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.
The Act applies to "goods", and clause (22) of section 2 defines that word very widely. This article reads the clauses that fix what goods are, when they are "imported goods", "dutiable goods" or "prohibited goods", what counts as smuggling, and the terms for baggage, stores, conveyances and warehouses.
This article follows the text on the CBIC portal updated to 30 March 2022 (the Act as amended up to the Finance Act, 2022). Please check any later Finance Act changes to these definitions before acting.
Goods include vessels, aircraft and vehicles, stores, baggage, currency and negotiable instruments, and any other kind of movable property. Prohibited goods are goods whose import or export is subject to a prohibition under this Act or any other law, but not goods for which the conditions of permission have been complied with. Smuggling means any act or omission that renders goods liable to confiscation under section 111 or section 113.
What "goods" covers
Clause (22) says "goods" includes: (a) vessels, aircrafts and vehicles; (b) stores; (c) baggage; (d) currency and negotiable instruments; and (e) any other kind of movable property. The word "includes" shows the list is not closed, and clause (e) sweeps in every other kind of movable property. A ship or an aircraft can therefore itself be goods, and so can cash in the form of currency or a negotiable instrument.
Clause (23) defines "import", with its grammatical variations and cognate expressions, as bringing into India from a place outside India. Clause (18) defines "export" in the mirror way: taking out of India to a place outside India. Because clause (27), explained in our article on sections 1 and 2, makes "India" include the territorial waters, the two directions are measured against that boundary.
Imported goods, export goods and dutiable goods
Three definitions classify goods by where they are in the journey.
Clause (25) says "imported goods" means any goods brought into India from a place outside India, but it does not include goods which have been cleared for home consumption. So goods stop being "imported goods" once they are cleared for home consumption. Clause (19) says "export goods" means any goods which are to be taken out of India to a place outside India.
Clause (14) says "dutiable goods" means any goods which are chargeable to duty and on which duty has not been paid. Clause (15) says "duty" means a duty of customs leviable under this Act. The two clauses together describe what is meant by goods on which customs duty is yet to be paid. For what the charge of duty rests on, see our article on section 12, and for the tax structure on imports see types of customs duty.
Before goods are brought in, it helps to know whether they are subject to a registration or monitoring condition. If they are, completing it correctly is part of meeting the conditions that the "prohibited goods" definition below refers to; our team handles SIMS registration among other import approvals.
Prohibited goods
Clause (33) says "prohibited goods" means any goods the import or export of which is subject to any prohibition under this Act or any other law for the time being in force, but does not include any such goods in respect of which the conditions subject to which the goods are permitted to be imported or exported have been complied with.
Read it in two steps. First, there must be a prohibition under this Act or any other law. The source of the prohibition can be outside the Customs Act. Second, the carve-out: if goods are permitted subject to conditions and those conditions have been complied with, the goods are not "prohibited goods". The practical meaning is that compliance with the permission conditions changes the status of the goods, while a failure to comply leaves them within the definition. Where the Act itself lets the Central Government prohibit imports and exports, it does so under section 11, explained in our article on section 11.
Smuggling
Clause (39) defines "smuggling", in relation to any goods, as any act or omission which will render such goods liable to confiscation under section 111 or section 113. The definition is therefore not independent: it takes its meaning from the confiscation provisions. Both sections sit in the chapter on confiscation and penalties, which this article does not explain. Our post on confiscation of goods under section 111 discusses the first of these, and the point to carry forward from this section is that "smuggling" is defined by liability to confiscation, whether or not any intention is spoken of in the clause. The clause itself speaks of an act or omission.
Baggage, stores, conveyance and vehicles
| Term | Clause | What the text says |
|---|---|---|
| Baggage | (3) | Includes unaccompanied baggage but does not include motor vehicles |
| Stores | (38) | Goods for use in a vessel or aircraft, including fuel and spare parts and other articles of equipment, whether or not for immediate fitting |
| Coastal goods | (7) | Goods, other than imported goods, transported in a vessel from one port in India to another |
| Conveyance | (9) | Includes a vessel, an aircraft and a vehicle |
| Vehicle | (42) | Conveyance of any kind used on land, including a railway vehicle |
| Aircraft | (1A) | Same meaning as in the Aircraft Act, 1934 (22 of 1934) |
| Foreign-going vessel or aircraft | (21) | Vessel or aircraft engaged in carriage of goods or passengers between a port or airport in India and one outside India, whether touching an intermediate Indian port or not; includes a foreign naval vessel in naval exercises, a vessel fishing or operating outside the territorial waters, and any vessel or aircraft proceeding to a place outside India for any purpose |
| Warehouse | (43) | A public warehouse licensed under section 57, a private warehouse licensed under section 58 or a special warehouse licensed under section 58A |
| Warehoused goods | (44) | Goods deposited in a warehouse |
Note how the clauses interact. Baggage is both a kind of goods (clause (22)(c)) and excludes motor vehicles. A vessel is a conveyance and also goods. Stores are goods too, and they are defined by their use in a vessel or aircraft. For warehouses, clause (43) names the three licence types, and our post on customs bonded warehousing explains how warehousing works.
A short example with invented names. Sagar Marine Supplies Ltd. loads fuel and spare parts for a ship leaving an Indian port for a destination abroad. Those items are "stores" under clause (38) and so also "goods" under clause (22)(b). The ship is a foreign-going vessel under clause (21), and the same ship is itself "goods" under clause (22)(a).
Printing note
Clause (21A) of section 2 refers in the copy to the "Central Excises and Salt Act, 1944", with a footnote that the name is now "Central Excise Act". Clause (45), the old definition of a warehousing station, appears only as an omitted clause. Neither affects the clauses above.
Need help with import approvals?
If your product needs a registration or permission before it can be imported, sorting that out before the shipment sails avoids last-minute problems at clearance. We can guide you through SIMS registration and tell you what else to line up.
Key takeaways
- "Goods" include vessels, aircraft and vehicles, stores, baggage, currency and negotiable instruments and any other movable property.
- Imported goods stop being "imported goods" once cleared for home consumption.
- Dutiable goods are chargeable to duty and have not had duty paid.
- Prohibited goods exclude goods whose permission conditions have been complied with.
- Smuggling is defined by reference to liability to confiscation under section 111 or section 113.
- Baggage includes unaccompanied baggage but not motor vehicles.
Read next
- Sections 1 and 2: short title, extent and territorial definitions
- Section 11: power to prohibit import or export of goods
- Confiscation of Goods Under Customs: Section 111
- Key Definitions Under Customs Act: Goods, Import, Export
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. Finance Acts of 2023 and later, and the current rules, regulations and notifications, should be checked. This article is general information, not legal advice; check the official text before acting.