The 2007 Budget introduced the establishment of the Customs Appeal Tribunal to enhance the smooth and effective implementation of the tax administration appeal system and to render it more business and client friendly. The Customs Appeal Tribunal was established pursuant to amendments made to the Customs Act 1967 [Act 235], the Excise Act 1976 [Act 176], the Sales Tax Act 1972 [Act 64] and the Service Tax Act 1975 [Act 151] with effect from 1 June 2007. The Customs (Appeal Tribunal) Regulations 2007 (P.U.(A) 210/2007) also came into force simultaneously. 

Prior to the establishment of the Tribunal, any person aggrieved by the decision of the Director General of Customs, which is mostly related to the classification and valuation of goods and taxable services, had to appeal to the Minister of Finance. With the establishment of the Tribunal, all appeals against the decision of the Director General of Customs (except in any matter relating to compound or the seizure of goods) must be made to the Tribunal.

The Tribunal is an independent judicial body and it's decision is deemed to be an order of a Sessions Court and can be enforced accordingly. The decision of the Tribunal is final and binding on all parties.