Sections 36 and 38 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 36 requires the Central Government to establish a Directorate of Enforcement, with a Director and other officers who are called officers of Enforcement. Section 38 lets the Central Government authorise customs, central excise, police and other officers to exercise some of their powers. Section 37, which sits between them, is the subject of a separate article.
Section 36(1) says the Central Government shall establish a Directorate of Enforcement with a Director and such other officers as it thinks fit. Section 36(2) lets it authorise senior officers to appoint officers below the rank of Assistant Director. Section 36(3) lets an officer of Enforcement exercise powers subject to conditions and limitations the Government may impose. Section 38 lets the Government authorise other officers by order, who then have the like powers conferred on income-tax authorities.
About this article
This article is based on the consolidated text of the Act consulted (amendments shown up to Act 50 of 2019). Later amendments should be checked. Sections 36 and 38 are printed without a footnote of amendment. The powers of investigation, search and seizure sit in section 37, covered in our article on section 37. For how the Directorate works in practice, see our guide to the Enforcement Directorate and FEMA. If you have received a summons or a notice from an enforcement officer, our legal consultation team can help you understand your position.
Section 36(1): the Directorate and its officers
The Central Government shall establish a Directorate of Enforcement with a Director and such other officers or class of officers as it thinks fit, who shall be called officers of Enforcement, for the purposes of this Act.
Two things stand out. The word is "shall": the Directorate is a requirement of the Act, not an option. And the Act gives no number or grades of posts; it leaves that to the Central Government's view of what it "thinks fit". The "Director of Enforcement" is defined in section 2(k) as the Director of Enforcement appointed under sub-section (1) of section 36.
Section 36(2): appointing officers below the rank of Assistant Director
Without prejudice to sub-section (1), the Central Government may authorise the Director of Enforcement, an Additional Director of Enforcement, a Special Director of Enforcement or a Deputy Director of Enforcement to appoint officers of Enforcement below the rank of an Assistant Director of Enforcement.
So there are two levels in the text. The Central Government itself deals with the Director and the senior officers under sub-section (1). For officers below Assistant Director rank, it may delegate the power of appointment to the four named officers. The word is "may": the sub-section is an enabling provision, and the Act does not say whether an authorisation has been given. That is a matter of the Government's orders, not of the Act.
Section 36(3): conditions and limitations
Subject to such conditions and limitations as the Central Government may impose, an officer of Enforcement may exercise the powers and discharge the duties conferred or imposed on him under the Act. The Act does not list the conditions. A power an officer exercises under the Act is therefore always read with whatever limits the Central Government has imposed.
| Sub-section | What it does | Note |
|---|---|---|
| 36(1) | Establishes the Directorate; Director and other officers called officers of Enforcement | "Shall establish" |
| 36(2) | Government may authorise four named officers to appoint officers below Assistant Director | "May authorise" |
| 36(3) | Officers exercise their powers subject to conditions and limitations the Government imposes | No conditions printed |
Section 38(1): empowering other officers
The Central Government may, by order and subject to such conditions and limitations as it thinks fit to impose, authorise any officer of customs or any central excise officer or any police officer or any other officer of the Central Government or a State Government to exercise such of the powers and discharge such of the duties of the Director of Enforcement or any other officer of Enforcement under this Act as may be stated in the order.
The key words are "as may be stated in the order". The authorised officer does not get every power of an officer of Enforcement; he gets those the order names, and within the conditions it sets. The list of officers is broad ("any other officer of the Central Government or a State Government"), but the route is always an order of the Central Government.
Section 38(2): the like powers of income-tax authorities
The officers referred to in sub-section (1) shall exercise the like powers which are conferred on the income-tax authorities under the Income-tax Act, 1961 (43 of 1961), subject to such conditions and limitations as the Central Government may impose.
The reference is quoted as printed. The reader should check the current law for the corresponding provisions of the Income-tax Act; this article names no income-tax section, and for the income-tax side see our income-tax guides. Section 37(3) uses a similar formula for the officers of Enforcement, with the further words "subject to such limitations laid down under that Act".
How sections 36, 37 and 38 fit together
| Section | Who | What |
|---|---|---|
| 36 | Officers of Enforcement | Established by the Central Government; appointment and conditions |
| 37 | Director of Enforcement and officers not below Assistant Director, plus officers authorised by notification | Take up contraventions referred to in section 13 for investigation |
| 38 | Customs, central excise, police and other officers | Exercise powers named in an order of the Central Government |
The powers in section 37 relate to contraventions referred to in section 13, whose penalties are in our post on contravention and penalties under section 13. Sections 36 and 38 do not themselves create any power of search or seizure; they set up the officers and widen the pool.
Example. The Central Government establishes the Directorate under section 36(1). The Director of Enforcement, authorised under section 36(2), appoints an officer of Enforcement below the rank of Assistant Director. Separately, the Central Government by an order under section 38(1) authorises a customs officer posted at a port to exercise a stated power of an officer of Enforcement in respect of a particular kind of matter. The customs officer can act only to the extent the order states, and within its conditions. A company that receives a communication from such an officer can ask for the order under which he acts; whether the order exists and what it says is a fact outside the Act.
What the Act does not say
- It does not give the number, rank scale or location of officers.
- It does not list the conditions and limitations the Central Government may impose.
- It does not say which powers an order under section 38 will name; the order does.
- It does not describe the proceedings that follow an investigation beyond what other sections say.
Need help dealing with an enforcement officer?
Who is entitled to act, under what order and to what extent are the first questions when an officer contacts a business. Our legal consultation team can help you check authority and respond in an orderly way.
Key takeaways
- Section 36(1): the Central Government shall establish a Directorate of Enforcement; its officers are officers of Enforcement.
- Section 36(2): four named senior officers may be authorised to appoint officers below Assistant Director rank.
- Section 36(3): powers are exercised subject to conditions and limitations the Government imposes.
- Section 38(1): customs, central excise, police and other officers may be authorised by order, for the powers stated in the order.
- Section 38(2): such officers have the like powers of income-tax authorities, as printed; check the current law.
Read next
- Section 37: investigation, search and seizure powers
- Section 37A: seizure of equivalent assets for foreign holdings
- Section 39: presumption as to documents
- Enforcement Directorate and FEMA: Powers
Disclaimer: Based on a consolidated text of the Foreign Exchange Management Act, 1999 showing amendments up to Act 50 of 2019, as consulted on 2 October 2026. Limits, forms, timelines and procedures are set by rules, regulations and Reserve Bank directions made under the Act; they change from time to time and are not covered here. Later amendments should be checked. This article is general information, not legal advice; check the official text before acting.