Indirect Tax Laws and Practice · Trade Facilitation Measures

Section 151B of the Customs Act: Reciprocal Information Exchange

Updated 11 October 2026 · Fact-checked

Section 151B of the Customs Act, 1962 lets the Central Government enter into agreements with other countries to exchange information for trade facilitation, risk analysis, compliance checks and offence investigation. A notification can extend it to a contracting State, and the information can be used as evidence. To answer questions, state purpose, notification, evidence use and Board procedure.

Understand Section 151B: Reciprocal Exchange of Information

Goods cross borders, so Customs in India often needs facts that sit with a foreign authority: what the exporter declared there, the price on the foreign invoice, or whether a shipment is genuine. Section 151B gives a legal basis for getting those facts from other countries, and for giving facts back.

Under sub-section (1), the Central Government may enter into an agreement or other arrangement with the Government of a country outside India, or with competent authorities of that country, as it deems fit. The purposes listed are: facilitation of trade, enforcing the Act, and exchange of information for trade facilitation, effective risk analysis, verification of compliance, and prevention, combating and investigation of offences. The offences may be under this Act or under the corresponding laws in force in that country.

Sub-section (2) adds a control step. The Central Government may, by notification, direct that the section applies to the contracting State with which reciprocal arrangements have been made. The notification can carry conditions, exceptions or qualifications. Sub-section (3) says that, subject to sub-section (2), information received under sub-section (1) may also be used as evidence in investigations and proceedings under the Act.

Sub-section (4) deals with multilateral agreements for exchanging information or documents to verify compliance in identified cases. There, the Board specifies the procedure, the conditions of exchange and the person designated to exchange the information. Sub-section (5) is a validation clause: actions taken under agreements or arrangements made before the Finance Bill, 2018 received the President's assent are deemed to have been taken under this section.

The Explanation defines two terms. A contracting State is any country outside India with which the Central Government has made an agreement or arrangement, with its Government or authority, through an agreement or otherwise. Corresponding law is any law in force in that State that corresponds to any provision of the Act or deals with offences corresponding to offences under the Act.

Key rules to remember

Who may enter arrangements: Central Government ↔ foreign Government or its competent authorities (s.151B(1)); The power is with the Central Government, not the Board or the proper officer.
Purposes of exchange: Trade facilitation + enforcement + risk analysis + verification of compliance + prevention, combating and investigation of offences; Offences covered are under the Customs Act or the corresponding law of the other country.
Application to a contracting State: Notification by Central Government, with conditions, exceptions or qualifications (s.151B(2)); Evidence use in (3) is subject to sub-section (2).
Evidentiary use: Information received under (1) may also be used as evidence in investigations and proceedings under the Act (s.151B(3)); The word is 'may', and it is subject to the notification conditions.
Multilateral exchange: Board specifies: procedure + conditions + designated person (s.151B(4)); Applies for verification of compliance in identified cases.
Validation of past actions: Actions under pre-Finance Bill, 2018 assent arrangements are deemed taken under s.151B (s.151B(5)); Notwithstanding sub-sections (1), (2) and (3).

How to solve Section 151B: Reciprocal Exchange of Information questions

Use this order for any theory or case question on section 151B.

1Identify the facts: is there an agreement or arrangement with a foreign country, and who made it?
2Check the authority: the Central Government enters into the agreement, with the foreign Government or its competent authorities.
3Match the purpose: trade facilitation, risk analysis, compliance verification, or offence prevention and investigation.
4Check the notification under sub-section (2) and its conditions, exceptions or qualifications.
5Decide on evidence use under sub-section (3): allowed, but subject to sub-section (2).
6If the agreement is multilateral, bring in the Board's procedure, conditions and designated person under sub-section (4).
7Check the dates: for pre-2018 arrangements, apply the deeming rule in sub-section (5).
8Write a short conclusion tied to the facts.

Quickest way: Four-point recall: Who, Why, Notify, Use

When to use it: For MCQs and short-note questions where you have under two minutes.

Who: the Central Government makes the arrangement with a foreign Government or authority.
Why: trade facilitation, risk analysis, compliance verification, offence prevention and investigation.
Notify: sub-section (2) notification extends the section to the contracting State with conditions.
Use: information may be used as evidence; multilateral procedure is set by the Board.

Common mistakes in Section 151B: Reciprocal Exchange of Information

Saying the Board enters into the agreement with the foreign country.
The Board appears in sub-section (4), so students assume it holds the main power.
Fix: Remember the Central Government makes the agreement. The Board only specifies the procedure for multilateral exchange.
Saying exchanged information is always admissible as evidence.
Students remember sub-section (3) but forget its opening words.
Fix: Write that it 'may also be used' as evidence, subject to the sub-section (2) notification and its conditions.
Limiting the section to enforcement and offences.
The words 'investigation of offences' stand out.
Fix: List trade facilitation, effective risk analysis and verification of compliance as well.
Confusing corresponding law with the Customs Act itself.
The phrase sounds like a section of the Indian Act.
Fix: Corresponding law is a law in force in the contracting State, matching a provision of this Act or its offences.
Mixing up sections 151B, 108A and 135AA.
All three deal with information in the Customs Act.
Fix: 151B is exchange with foreign countries. 108A is domestic bodies furnishing information to the proper officer. 135AA is the penalty for publishing importer or exporter data.
Ignoring the validation clause for earlier arrangements.
Sub-section (5) looks like a technical add-on.
Fix: Note that actions under arrangements before the Finance Bill, 2018 received assent are deemed taken under section 151B.

Worked examples

Example 1

The Central Government signs a customs mutual assistance arrangement with a foreign country's customs administration. An Indian Customs officer receives from it export documents relevant to an undervaluation investigation. Can the information be used as evidence in proceedings under the Customs Act, 1962? Explain.

Show the solution

Section 151B(1) allows the Central Government to make arrangements with a foreign Government or its competent authorities for exchange of information, including for verification of compliance and investigation of offences.
Section 151B(3) says the information received under sub-section (1) may also be used as evidence in investigations and proceedings under the Act.
This is subject to sub-section (2): the Central Government may by notification apply the section to the contracting State, with conditions, exceptions or qualifications.
So you must check whether a notification exists and whether the use here falls within its conditions.

Answer: Yes, it may be used as evidence in investigations and proceedings under the Act, subject to any notification, conditions, exceptions or qualifications under section 151B(2).

Example 2

Define 'contracting State' and 'corresponding law' for section 151B, and state who specifies the procedure when a multilateral agreement is used for exchange of information.

Show the solution

Contracting State: any country outside India for which the Central Government has made agreement or arrangements with its Government or authority, through an agreement or otherwise.
Corresponding law: any law in force in the contracting State corresponding to any provision of the Customs Act or dealing with offences there corresponding to offences under the Act.
Multilateral case, sub-section (4): where the Central Government has entered into a multilateral agreement for exchange of information or documents to verify compliance in identified cases, the Board specifies the procedure, the conditions of exchange and the designation of the person through whom information is exchanged.

Answer: The Explanation defines both terms as above, and the Board specifies the procedure, conditions and designated person for multilateral exchanges.

Exam tips

Learn the purposes list by heart: facilitation, enforcement, risk analysis, compliance verification, offence prevention and investigation.
In MCQs, watch the actor: Central Government for agreements and notifications, Board for multilateral procedure.
For evidence questions, always add the qualification 'subject to sub-section (2)'.
Do not mix it with section 108A or 135AA in case scenarios; identify whether the information flows from abroad, from domestic bodies, or is being published.

Practice questions from Trade Facilitation Measures

Section 151B: Reciprocal Exchange of Information: frequently asked questions

What is section 151B of the Customs Act, 1962?

It lets the Central Government make agreements or arrangements with foreign Governments or their competent authorities to exchange information. The aims include trade facilitation, risk analysis, compliance verification and investigation of offences.

Can information received from another country be used as evidence?

Yes. Section 151B(3) says it may also be used as evidence in investigations and proceedings under the Act. This is subject to the notification and its conditions under sub-section (2).

What is the role of the Board in section 151B?

Where the Central Government has entered into a multilateral agreement for exchange of information or documents to verify compliance in identified cases, the Board specifies the procedure, conditions and the designated person for the exchange.

Does section 151B cover arrangements made before 2018?

Yes, through sub-section (5). Anything done under an agreement or arrangement made before the Finance Bill, 2018 received the President's assent is deemed to have been done under this section.