The ancient "custom" of gifting a part of his merchandise by a merchant to the King while entering a kingdom came to be formalized by the modern States into Customs duty. Customs duty is imposed on the goods imported into or exported out of the country. Developing economies including India use Customs duties as an important source of revenue and also a method to regulate the flow of goods.
Customs at Bombay
In 1615, The East India Co. set its base at Surat and started steadily strengthening its hold on the trade of Western India. Realizing the immense natural advantages of Mumbai Islands, the Surat Council of the East India Company urged the London Authorities to purchase the Mumbai Islands from the Portuguese. This was achieved in 1661, under the aegis of Marriage Treaty between Charles II of Great Britain and Infanta Catherine of Portugal. The East India Company took measures to encourage trade like construction of Custom House, Warehouses, Mole Stations, etc. In 1672, the President of the Surat Council and the Governor of Mumbai transferred the company's headquarters from Surat to Mumbai. Trade through Mumbai grew rapidly.
The reduction in Customs Duty, continuous immigration of traders from Surat and reduction in travel time from Mumbai to London gave a fillip to trade from the Mumbai Port.
The Bombay Customs House was headed by the Collector of Customs who reported to the Commissioner of Customs, Salt, Appeal and Aabkari, of the Bombay Presidency. Before 1911 the Custom department at Mumbai was accommodated in two main buildings namely the Fort Customs House and the Brach Customs House at the Princess Docks. The Fort Customs House was allotted sometime in 1922 to the District Collector of Bombay and others government offices and was known as Old Customs House.