Customs duty becomes payable when there is import into, or export (in rare cases) from India. Accordingly, customs duty may be levied on :

Import of Goods : Import has been defined as bringing into India of goods from a place outside India. India includes territorial waters of India. Territorial waters extend upto 12 nautical miles into the sea from the coast of India. The liability to pay import duty commences as soon as goods enter the territorial waters of India. However, for administrative purposes, it is collected when the goods are unloaded on the land of India. Accordingly, custom duty may be payable at a later date or with reference to the rate of duty applicable at a later date. However, no customs duty is leviable on goods which are in transit in the same ship or if goods are in transit from one ship to another.