Article by Shubham Singh – (2025) 37 Centax 262 (Article), Dated 20-12-2025
1. Introduction
Customs Brokers today operate under an intense scrutiny regime where every case of overvaluation, drawback fraud or misdeclaration tends to drag them in as Co Noticees. A careful reading of CBLR, 2018, CBIC’s latest instructions and recent Tribunal/High Court jurisprudence, however, shows a clear and consistent principle: a Customs Broker is a specialised documentation and compliance intermediary, not a guarantor of the client’s valuation or commercial conduct.
Customs Brokers today operate under an intense scrutiny regime where every case of overvaluation, drawback fraud or misdeclaration tends to drag them in as Co Noticees. A careful reading of CBLR, 2018, CBIC’s latest instructions and recent Tribunal/High Court jurisprudence, however, shows a clear and consistent principle: a Customs Broker is a specialised documentation and compliance intermediary, not a guarantor of the client’s valuation or commercial conduct.
2. Statutory Role and Core Obligations
Under Indian law, the statutory role of a Customs Broker flows from Section 146 of the Customs Act, 1962 read with the Customs Brokers Licensing Regulations, 2018 (CBLR, 2018). Section 146 mandates that no person can carry on business as a customs broker in relation to import, export or movement of conveyances at any customs station without a licence granted in accordance with the Board’s regulations; CBLR, 2018 is that regulatory code, laying down who can be licensed, how the licence is granted/renewed, and the conditions and discipline attached to it.
Within CBLR, 2018, Regulation 10 is the heart of the broker’s core obligations and the main touchstone for liability. It requires the broker to obtain proper authorisation from each client; transact business either personally or through approved employees; advise clients to comply with the Customs Act and allied laws and, where they do not, bring the matter to the Deputy/Assistant Commissioner (Reg. 10(d)); and exercise due diligence to ascertain the correctness of information imparted to clients in relation to clearance of cargo or baggage (Reg. 10(e)). It also mandates that brokers not withhold departmental orders or public notices, discharge duties with speed and efficiency (Reg. 10(m)), and verify the correctness of IEC, GSTIN, identity and functioning of clients using reliable, independent and authentic documents, data or information (Reg. 10(n)), which jurisprudence has clarified does not require routine physical verification if official databases and genuine documents are used. In practice, these obligations mean the broker must maintain proper KYC records, document client instructions, keep abreast of circulars and changes in law, and ensure that whatever is keyed into the customs system reflects the client’s documents and the legal position as the broker reasonably understands it—this is the benchmark later applied in any CBLR proceeding.
