Customs Act, 1962: Ensuring Safe Import of Food Products

When you pick up an imported food item from a supermarket shelf, have you ever wondered how it made it safely into the country? Behind every packet of imported cheese, bottle of olive oil, or can of exotic fruit lies a rigorous regulatory process. In India, the Customs Act, 1962 serves as the primary legal framework governing the entry of goods-including food products-into the country, working to ensure that what reaches your plate meets established safety standards.

What is the Customs Act, 1962? 🔗

The Customs Act, 1962 is a comprehensive legislation passed by Parliament to consolidate and regulate the import and export of goods in India. The Central Board of Indirect Taxes and Customs (CBIC), operating under the Ministry of Finance’s Department of Revenue, administers this Act. It establishes the legal framework for levying customs duties, defining prohibited goods, and setting procedures for examining and clearing imported consignments.

For the food industry specifically, this Act works alongside the Food Safety and Standards Act, 2006, creating a dual layer of protection. While FSSAI focuses on food-specific safety parameters, the Customs Act provides the border enforcement mechanism that prevents non-compliant food from entering Indian markets in the first place.

The bill of entry: your declaration at the border 🔗

The Bill of Entry (BOE) is the cornerstone document for any import transaction, including food products. According to import regulations, this legal document must be filed by importers or their authorized customs brokers when goods arrive at Indian ports, airports, or land customs stations. It serves as the official declaration containing detailed information about the imported goods.

What information does a bill of entry contain? 🔗

A complete Bill of Entry includes several critical details: description and quantity of goods, their declared value, the customs tariff heading under which they fall, applicable duty rates, and any exemption notifications being claimed. For food products, additional documentation such as FSSAI import licenses, certificates of origin, and health certificates must accompany the BOE.

The Indian Customs Electronic Data Interchange System (ICES) allows importers to file Bills of Entry electronically through the ICEGATE portal. This digital approach has significantly streamlined customs processing, reducing paperwork and clearance times. The system also integrates with FSSAI’s Food Import Clearance System (FICS) under the Single Window Interface for Facilitating Trade (SWIFT), enabling coordinated clearance from multiple regulatory agencies.

Timeline requirements 🔗

Importers must file the Bill of Entry before the end of the next working day following the arrival of goods. Prior filing is also permitted-up to 30 days before the actual arrival-which helps expedite clearance. Late filing attracts penalties of five thousand rupees per day for the first three days, with increasing charges thereafter.

Prohibitions on adulterated and misbranded food 🔗

One of the most critical aspects of the Customs Act concerning food safety is its prohibition on importing adulterated or misbranded food products. Under Section 111(d) of the Act, goods imported in violation of any law become liable to confiscation. When it comes to food, this section works in conjunction with food safety regulations.

What constitutes adulterated food? 🔗

Food is considered adulterated when it contains substances that render it unsafe or substandard-whether through contamination, addition of harmful substances, or failure to meet prescribed quality standards. The Food Safety and Standards Act defines an adulterant as any material used for making food that is unsafe, substandard, or contains extraneous matter.

Misbranding and its consequences 🔗

Misbranded food refers to products that carry false claims, incorrect labelling, or deceptive packaging. All packaged food imports must comply with labelling requirements that include: the name and address of the importer, net quantity in standard units, manufacturing and expiry dates, and maximum retail price. Failure to meet these conditions renders the import prohibited, and such goods become liable to confiscation under the Customs Act.

Powers of customs officers 🔗

The Customs Act grants significant authority to customs officers to ensure compliance with food safety regulations. These powers are essential for effective border control.

Detention and inspection 🔗

Customs officers have the authority to detain any imported package suspected of containing prohibited articles, including adulterated or unsafe food. Once detained, samples may be drawn and sent to authorized laboratories for testing. For high-risk food items, mandatory testing protocols apply, with samples drawn from initial consignments to verify safety and quality standards.

Examination and clearance 🔗

After a Bill of Entry is filed, customs officers examine the goods along with requisite documents. The Risk Management System facilitates this process by automatically routing low-risk shipments for faster clearance while flagging higher-risk consignments for detailed inspection. For food imports requiring FSSAI clearance, a No Objection Certificate (NOC) must be obtained before customs releases the goods.

Confiscation and penalties 🔗

Food consignments that fail laboratory testing or do not conform to prescribed standards face serious consequences. Such goods must either be re-exported or destroyed at the importer’s expense. Additionally, importers face penalties under both the Customs Act and the Food Safety and Standards Act. The law does not distinguish between domestically produced and imported food when it comes to penalties for adulteration or misbranding.

Valuation of goods for customs duty 🔗

Determining the correct value of imported food products is crucial for calculating applicable customs duties. India follows the WTO Agreement on Customs Valuation, which establishes uniform standards to prevent arbitrary or fictitious valuation.

Transaction value method 🔗

The primary basis for customs valuation is the transaction value-the price actually paid or payable for the goods when sold for export to India. This method applies when the buyer and seller are not related parties and the price is the sole consideration for sale. Importers must declare this value truthfully in the Bill of Entry, supported by commercial invoices and other relevant documents.

Alternative valuation methods 🔗

When transaction value cannot be determined or is deemed unreliable, customs authorities apply alternative methods in a specific sequence: transaction value of identical goods, transaction value of similar goods, deductive value method, computed value method, and finally the fallback method. The Directorate General of Valuation oversees the implementation of these valuation principles in India.

Addressing valuation fraud 🔗

Undervaluation of imports to evade customs duty is a significant concern. The Act empowers customs authorities to question declared values when they have reasonable grounds to doubt their accuracy. If importers cannot provide satisfactory evidence supporting their declared values, customs may reject them and determine the value using alternative methods. This provision, which emerged from India’s proposal during Uruguay Round negotiations, helps prevent revenue loss while maintaining fair trade practices.

Integration with food safety regulations 🔗

The Customs Act does not operate in isolation when it comes to food imports. It functions as part of an integrated regulatory framework that includes FSSAI regulations, the Foreign Trade (Development and Regulation) Act, and various other sector-specific laws.

The FSSAI Food Imports Manual establishes detailed procedures for clearing imported food consignments. Every food importer must hold both an Importer Exporter Code from DGFT and a valid FSSAI food business license. The clearance process involves document verification, visual inspection, and risk-based sampling and testing of food articles.

Compliance requirements for food importers 🔗

Food importers must navigate several compliance requirements to ensure smooth customs clearance.

Documentation: Maintain complete records of all import transactions for at least five years, including Bills of Entry, duty payment receipts, examination reports, and laboratory test results. Customs authorities conduct periodic post-clearance audits to verify compliance.

Licensing: Obtain an FSSAI import license before commencing food import operations. Since September 2024, registration on the ReFom Portal has become mandatory for food importers.

Labelling: Ensure all imported food products comply with FSSAI labelling requirements, including declarations in English or Hindi, complete ingredient lists, nutritional information, and appropriate date markings.

Shelf life: Imported food must have adequate remaining shelf life as specified in regulations at the time of clearance.

The bigger picture 🔗

The Customs Act, 1962, represents India’s first line of defence against unsafe food entering the country through international trade. By requiring detailed declarations, empowering officers to inspect and detain suspect consignments, and establishing valuation rules aligned with international standards, it creates a robust framework for food import regulation. Working in tandem with FSSAI and other regulatory bodies, it helps ensure that the growing volume of imported food products on Indian shelves meets the safety standards consumers expect and deserve.

What do you think? As international food trade continues to expand, how do you believe the balance between facilitating legitimate trade and ensuring food safety should evolve? What role should technology play in making customs clearance both faster and safer?

References

1. https://www.indiacode.nic.in/handle/123456789/2475?view_type=browse
2. https://www.trade.gov/country-commercial-guides/india-customs-regulations
3. https://www.bajajfinserv.in/bill-of-entry
4. https://mumbaicustomszone3.gov.in/procedure-for-imported-goods
5. https://nyaaya.org/guest-blog/how-does-indian-law-deal-with-food-adulteration/
6. https://blog.intoglo.com/documents-required-for-custom-clearance-in-india-guide/
7. https://fssai.gov.in/upload/uploadfiles/files/pfa-acts-and-rules.pdf
8. https://www.wto.org/english/tratop_e/cusval_e/cusval_info_e.htm
9. https://dov.gov.in/brief-valuation
10. https://fssai.gov.in/upload/knowledge_hub/12206868b57f840f51fFood%20Imports%20Manual.pdf
11. https://www.india-briefing.com/news/food-import-procedure-india-fssai-steps-reforms-29980.html/