The Customs Act was enacted in 1962 with an objective to consolidate and modify the legal principles relating to customs. The Act came into force on the first day of February 1963 when the government issued notification in the Gazette of India. The Central government extended the applicability of the Act to the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976 from January 15, 1987.

The Act provides for the appointment of different classes of officers by the Central Board of Excise and Customs to serve the duties in the customs department. The officers shall consists of Chief Commissioner, Commissioners, Joint Commissioners, Deputy Commissioners, Assistant Commissioners and other officers necessary for performing duties under the Act. The officers appointed under the Act shall perform the functions as entrusted to it by the Board or the present legislation. The restricted or absolute functions of the Board shall be entrusted by the Central Government to any other officers of customs as provided by the Act.

The Act further provides for the assigning of customs ports and airports for the loading and unloading of commodities, warehousing location, coastal ports for trade in coastal commodities etc. The Commissioner of Customs is empowered to grant the landing place for commodities and indicate the restrictions of custom area. The Central Government shall restrict the transfer of certain specified commodities for safeguarding security of the nation and public order, conserving decency and integrity, protection of foreign exchange, prevention of destruction to Indian economy, preservation of agricultural products and fisheries etc. The Central Government shall have power to describe certain types of goods for proper checking and examination where such goods are found to be illegally imported or such goods are likely to be disposed, by notifying in the Gazette of India.

The persons who holds or possess the commodities notified by the Government shall within the prescribed period surrender such goods to the proper officer with a statement containing the details of the goods and the place where these commodities are stored. The person who possesses the commodities notified by the Government shall not keep those goods other than the intimated place after the expiry of seven days of such notification. Where a person transfers the notified commodities, such person shall keep with him a transport voucher, clearance certificate and such other steps to prove that the goods are not illegally imported.

The customs duties for the import or export commodities are imposed according to the provisions of Customs Tariffs Act of 1975. The goods for which customs duty is imposed shall be valued at the rate at which those goods are generally sold. The Central Government is empowered to grant reduction in the customs duty for notified or other commodities in the interest of the pubic, either wholly or partially. The Act also provides for the reimbursement of export duty where such goods are returned to the original owner, the goods are re-imported within a term of one year of export or an application is furnished for the refund of duty. The legislation contains a chapter dealing with the conveyances for moving imported or exported commodities, loading and unloading of commodities and exemption granted to certain set of conveyances from the provisions of the legislation.

The Central Government shall assign public warehouses for depositing dutiable commodities. The Act grants license to private warehouses under certain conditional requirements. If the licensee performs any act in breach of the terms of the license, the Commissioner shall cancel the license by furnishing notice to the licensee.

The Customs Act, 1962 was amended by substituting certain provisions by enacting Customs (Amendment) Act of 1969, Customs Tariff Act of 1975, Customs and Central Excise (Amendment) Act of 1991, Customs, Central Excises & Salt and Central Board of Revenue (Amendment) Act of 1978 etc. In 2011 the Central Government enacted The Customs (Amendment and Validation) Act to further make modification in the Customs Act, 1962. The amending Act conferred power of assessment to the officers under the Customs Act and they shall be considered as proper officers for discharging functions under the Act.