Customs Act 1962: The Sections and Deadlines That Changed in 2025-26
Last updated:
Most import compliance notes in circulation were written against a version of the Customs Act 1962 that no longer applies. Between the Finance Act, 2025 and the Finance Act, 2026, provisional assessment acquired a hard outer limit, a post-clearance self-correction route opened, and the master exemption notification that almost every bill of entry once cited was superseded outright. A team still working from the bare Act as it stood in 2023 will get some answers wrong. This article sets out the provisions that govern an import today - charge, assessment, demands, refunds and appeals - and what moved, when, and under which instrument.
The charge, and the date that fixes it
Duty is levied by section 12 of the Customs Act, 1962 on goods imported into or exported from India, but the rates sit in the First Schedule to the Customs Tariff Act, 1975. Section 12 creates the charge; the Customs Tariff Act supplies the number.
Section 15 does the work most disputes turn on. For goods entered for home consumption, the rate and tariff valuation are those in force on the date the bill of entry is presented under section 46 or the date of entry inwards, whichever is later; for warehoused goods, the date the ex-bond bill of entry is presented. That rule decides which customs notification governs a consignment, a question that became urgent on 1 November 2025 when Notification No. 45/2025-Customs dated 24 October 2025 superseded Notification No. 50/2017-Customs and thirty other exemption notifications.
Assessment belongs to the importer, and now it runs on a clock
Section 17 places self-assessment on the importer or exporter. The proper officer may verify and re-assess, and where the re-assessment is not accepted in writing, section 17(5) requires a speaking order within fifteen days. That order provides the formal basis for an appeal; where the importer does not agree with the re-assessment, the position should be recorded in writing rather than relying on an oral discussion.
Section 18 governs provisional assessment, and this is where the Finance Act, 2025 made its most consequential change. New sub-section (1B) requires the proper officer to finalise within two years of the provisional assessment, extendable by one year by the Principal Commissioner or Commissioner. Sub-section (1C) lists the grounds on which that clock stays suspended, and the officer must tell the importer why finalisation is pending. Before this, section 18 carried no limitation at all.
The transitional rule matters more than the prospective one. For provisional assessments pending when the Finance Act, 2025 received assent on 29 March 2025, the two years run from that date, putting legacy cases on an outer date in March 2027, or March 2028 if extended. Importers carrying old provisional assessments should be reconciling bonds and pressing for finalisation now.
Section 18A: correcting an entry without starting a dispute
Section 18A was inserted by section 93 of the Finance Act, 2025 but lay dormant for six months. It became operational on 1 November 2025 through the Customs (Voluntary Revision of Entries Post Clearance) Regulations, 2025, notified by Notification No. 70/2025-Customs (N.T.) dated 30 October 2025, with guidelines in CBIC Circular No. 26/2025-Customs dated 31 October 2025.
The mechanism is an electronic application on the common portal, filed at the port where duty was paid, covering entries under a single bill of entry or shipping bill, with a Rs 1,000 fee under Notification No. 69/2025-Customs (N.T.). It is unavailable once audit, investigation, search or seizure has begun, and Notification No. 71/2025-Customs (N.T.) excludes cases where a separate reversal procedure exists. Records must be kept for five years.
Two timing points are easy to miss. Where the revision produces additional duty, it is paid voluntarily with interest under section 28AA and no outer time limit is prescribed. Where it produces a refund, the date the Acknowledgement Receipt Number is generated is deemed the date of the claim under section 27, so the one-year limitation in the Explanation to section 27(1) runs from the date duty was paid. The route also answers ITC Ltd. v. CCE (2019) 17 SCC 46, which held a refund cannot be claimed unless the assessment is first modified in a manner known to law. Section 18A supplies that modification without an appeal, which matters for valuation and classification positions that surface only after goods reach the factory.
Demands and refunds: the periods that run against you
Under section 28, a notice for duty not levied, short-levied or erroneously refunded must be served within two years of the relevant date, or five years where there is collusion, wilful mis-statement or suppression. Section 28(9) then binds the department: the amount must be determined within six months of the notice in ordinary cases and one year in extended-period cases, each extendable once by a like period, failing which the proceedings are treated as concluded.
Interest on delayed payment under section 28AA is fixed at 15% per annum by Notification No. 33/2016-Customs (N.T.). A refund claim under section 27 must be filed within one year, with interest on delayed refunds at 6% under Notification No. 75/2003-Customs (N.T.). These rates sit in notifications rather than the sections, so they are worth checking against the source text.
Appeals: sixty days, three months, and the pre-deposit
An appeal to the Commissioner (Appeals) under section 128 must be filed within sixty days of communication, with a further thirty days condonable for sufficient cause. Ninety days is an absolute outer limit. An appeal to CESTAT under section 129A runs on three months from communication, and section 129A(5) permits the Tribunal to admit a delayed appeal where sufficient cause is shown. Section 129E requires a pre-deposit of 7.5% at the first appellate stage and 10% before the Tribunal where the Commissioner (Appeals) order is challenged, capped at Rs 10 crore.
| Stage | Provision | Time limit | Pre-deposit |
|---|---|---|---|
| Speaking order on re-assessment | Section 17(5) | 15 days | Not applicable |
| Finalisation of provisional assessment | Section 18(1B) | 2 years, extendable by 1 year | Not applicable |
| Demand notice - ordinary | Section 28(1) | 2 years from relevant date | Not applicable |
| Demand notice - suppression | Section 28(4) | 5 years from relevant date | Not applicable |
| Refund claim | Section 27 | 1 year from payment of duty | Not applicable |
| Commissioner (Appeals) | Section 128 | 60 days, plus 30 condonable | 7.5% (section 129E) |
| CESTAT | Section 129A | 3 months from communication; delay may be condoned for sufficient cause under section 129A(5) | 10% (section 129E) |
What the Finance Act, 2026 moved
The Finance Act, 2026 (Act 4 of 2026), assented on 30 March 2026, changes several working assumptions. An advance ruling under section 28J(2) is now valid for five years rather than three, and a ruling in force on the date of assent can be extended to five years from its original date on application. Section 67 has been substituted so prior permission is no longer needed to move warehoused goods between bonded warehouses. A penalty paid under section 28(5), on determination under section 28(6), is now deemed to be a charge for non-payment of duty rather than a penalty. The amendment changes the statutory treatment of that amount in the proceedings.
Alongside these, the Deferred Payment of Import Duty Rules, 2016 were amended from 1 March 2026 so deferred duty is payable by the first day of the following month, except March. Further tariffication took effect from 1 May 2026, moving basic customs duty on goods in some 54 headings and tariff items onto the First Schedule rate. Any in-house tax team whose duty masters were last refreshed in 2025 is working from stale rates.
Which version of the Act governs your consignment
The governing version of the Customs Act 1962 depends on the commencement date of the relevant amendment and any applicable transitional provision. Section 15 is particularly relevant to the rate of duty and tariff valuation, while the governing notification must likewise be checked for its effective date. There is therefore no single date-independent position, which is why an undated internal note is worse than none.
The next step is narrow: pull every provisional assessment still open, date it against the March 2025 assent, and check whether any bill of entry filed after 1 November 2025 cites a superseded notification. Where the underlying issue is eligible for voluntary revision and no statutory or regulatory exclusion applies, section 18A may provide a route to correct it. Teams wanting the sections, circulars and notifications in one place, cited and dated, can see how AskSolique handles customs research for CA firms.
Frequently Asked Questions
1. Is the Customs Act 1962 still in force after the Income-tax Act, 2025?
Yes. The Income-tax Act, 2025 replaced the Income-tax Act, 1961 with effect from 1 April 2026 and has no bearing on indirect tax. The Customs Act, 1962 remains in force and continues to be amended annually through the Finance Act. The confusion arises because both statutes were revised in the same window, but they operate independently and the customs numbering is unchanged.
2. What is the difference between the Customs Act, 1962 and the Customs Tariff Act, 1975?
The Customs Act, 1962 is the procedural and charging statute: it creates the levy under section 12 and governs assessment, clearance, demands, appeals and offences. The Customs Tariff Act, 1975 carries the rate schedules, the classification structure based on the Harmonized System, and the trade remedy provisions for anti-dumping, countervailing and safeguard duties. A complete duty position needs both.
3. Can CESTAT condone a delay beyond ninety days in a customs appeal?
Section 129A(3) gives three months from communication of the order for an appeal to the Appellate Tribunal. Section 129A(5) also permits the Appellate Tribunal to admit an appeal after the prescribed period if it is satisfied that there was sufficient cause for not presenting it within time. The filing date should therefore be recorded carefully, and any delay should be explained and documented.
4. Does a voluntary revision under section 18A attract a penalty?
The section 18A mechanism permits additional duty to be paid voluntarily with interest under section 28AA without the ordinary penalty consequence for the underlying short-payment. Separately, the regulations provide for consequences for contravention of their requirements. Eligibility is also subject to the statutory and regulatory exclusions, including where audit, search, seizure or summons has been initiated and intimated.
5. Where can the current text of the Customs Act 1962 and CBIC notifications be found?
The bare Act is published on India Code at indiacode.nic.in. Notifications, circulars and instructions are issued by CBIC at cbic.gov.in, with a consolidated repository at taxinformation.cbic.gov.in. Because the operative rate often sits in a notification rather than the section, both need to be checked for the same date, and the notification must be the one in force on the section 15 relevant date.
Stay in the know with AskSolique.
Occasional insights on tax, regulation, and what’s new at AskSolique. Only when we have something worth sharing.
