Sections 96-99 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 second half of Chapter XII deals with the vessels that carry coastal goods. Section 96 says where coastal goods may be loaded and unloaded, section 97 says a coasting vessel may not leave a port without a written order from the proper officer and lists what must happen first, section 98 applies several other provisions of the Act to coastal goods and vessels, section 98A lets the Central Government relax the Chapter, and section 99 gives rule-making powers. This article explains them as printed in the text on the CBIC portal updated to 30 March 2022.
Coastal goods may be loaded or unloaded only at a customs port or coastal port appointed under section 7 (section 96). A vessel that has brought or loaded coastal goods cannot depart until the proper officer gives a written order, which is not given until the master has answered questions, charges and penalties are paid or secured, section 116 penalty is dealt with, and the Chapter and its rules are complied with (section 97). Sections 33, 34, 36, 37 and 38 apply so far as may be, and the Central Government may extend others (section 98). It may exempt coastal goods or vessels from the Chapter in the public interest (section 98A) and make rules (section 99).
The text consulted is the CBIC copy last updated on 30 March 2022 (the Act as amended up to the Finance Act, 2022). Later Finance Acts may have changed these sections, so check them before acting.
How this part fits with sections 91 to 95
Sections 91 to 95 deal with the paperwork for coastal goods: the bill of coastal goods, loading, clearance at destination and the advice book. They are in our article on sections 91 to 95. This article covers the rest of the chapter.
If a coasting vessel has been held or a written order refused, our legal consultation page explains how we can help.
Section 96: only at customs ports or coastal ports
No coastal goods shall be loaded on, or unloaded from, any vessel at any port other than a customs port or a coastal port appointed under section 7 for the loading or unloading of such goods.
The test is the port's status: a customs port, or a coastal port appointed under section 7 for that loading or unloading. Appointment under section 7 is outside this article.
Section 97: no coasting vessel to leave without a written order
Sub-section (1). The master of a vessel which has brought or loaded any coastal goods at a customs or coastal port shall not cause or permit the vessel to depart from that port until a written order to that effect has been given by the proper officer.
Sub-section (2). No such order shall be given until all four of the following are met.
| Clause | Condition for the written order |
|---|---|
| (a) | The master has answered the questions put to him under section 38 |
| (b) | All charges and penalties due in respect of the vessel, or from the master, have been paid, or payment secured by such guarantee or deposit of such amount as the proper officer may direct |
| (c) | The master has satisfied the proper officer that no penalty is leviable on him under section 116, or payment of any penalty that may be levied under that section has been secured by such guarantee or deposit of such amount as the proper officer may direct |
| (d) | The provisions of the Chapter, and any rules and regulations relating to coastal goods and vessels carrying coastal goods, have been complied with |
The four are cumulative: the order is not to be given until all of them are satisfied. A vessel may therefore be held until each is met. Clauses (b) and (c) allow "guarantee or deposit" as a way of securing payment, in an amount the proper officer directs, so the master need not always pay in cash before the order is given.
Example. The master of the coasting vessel Sea Pearl has unloaded cement at a coastal port and wishes to sail. Before the proper officer gives the written order, the master must have answered the questions put under section 38, the dues must be paid or secured, he must have satisfied the officer on the section 116 penalty point, and the Chapter's requirements must have been met. Sailing without the order is barred by sub-section (1).
For the penalty provisions that section 116 belongs to, see our article on sections 116 and 117.
Section 98: certain provisions applied to coastal goods
| Sub-section | What it applies | To what |
|---|---|---|
| (1) | Sections 33, 34 and 36, so far as may be | Coastal goods, as they apply to imported goods or export goods |
| (2) | Sections 37 and 38, so far as may be | Vessels carrying coastal goods, as they apply to vessels carrying imported goods or export goods |
| (3) | All or any of the other provisions of Chapter VI and the provisions of section 45, by notification | Coastal goods or vessels carrying coastal goods, subject to exceptions and modifications in the notification |
The words "so far as may be" mean the borrowed sections apply only to the extent they fit coastal goods and vessels. Sub-section (3) is a power of the Central Government exercised by notification in the Official Gazette; this article names no notification.
Section 98A: power to relax
Section 98A was inserted by section 64 of the Finance Act, 1995 (22 of 1995), with effect from 26.05.1995, as the footnote prints. If the Central Government is satisfied that it is necessary in the public interest, it may, by notification in the Official Gazette, exempt generally, either absolutely or subject to conditions specified in the notification, coastal goods or vessels carrying coastal goods from all or any of the provisions of this Chapter.
So the exemption can be from the whole Chapter or from some of its provisions, and can be unconditional or conditional. The text names no exempted class.
Section 99: power to make rules
The Central Government may make rules for:
- (a) preventing the taking out of India of any coastal goods the export of which is dutiable or prohibited under the Act or any other law for the time being in force; and
- (b) preventing, where a vessel carries coastal goods as well as imported or export goods, the substitution of imported or export goods by coastal goods.
These are the only two purposes the section lists. Clause (a) guards against coastal movement being used to take dutiable or prohibited goods out of India. Clause (b) guards against swapping coastal cargo for imported or export cargo on a mixed vessel.
Practical points for masters and operators
- Never sail without the written order. Section 97(1) bars departure until it is given.
- Work through all four conditions. Answering section 38 questions, paying or securing dues, clearing the penalty question and complying with the Chapter.
- Use security where allowed. Clauses (b) and (c) accept a guarantee or deposit in the amount the officer directs.
- Load and unload only at the right ports. Section 96 limits loading and unloading to customs ports and coastal ports appointed under section 7.
- Watch for notifications. Sections 98(3) and 98A both work through notifications that may extend or relax the Chapter.
Need help with a vessel or cargo dispute?
If a written order is delayed or a penalty question is raised, our team can read the sections with you and plan the response. See our legal consultation page.
Key takeaways
- Coastal goods can be loaded or unloaded only at a customs port or a coastal port appointed under section 7 (section 96).
- A coasting vessel cannot depart without the proper officer's written order, which depends on four cumulative conditions (section 97).
- Sections 33, 34, 36, 37 and 38 apply to coastal goods and vessels so far as may be, and others may be extended by notification (section 98).
- The Central Government may exempt coastal goods or vessels from the Chapter in the public interest (section 98A).
- Rules may prevent export of dutiable or prohibited coastal goods and substitution of cargo (section 99).
- Later Finance Acts may have changed these sections; check before acting.
Read next
- Sections 91 to 95: coastal goods entry, loading and clearance
- Section 99A: customs audit of importers and exporters
- Sections 116 and 117: penalty for not accounting for goods and residual penalty
- Penalties under the Customs Act: sections 112 to 117
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.