Extension of Deferred Payment of Customs Duty to Eligible Manufacturer Importers (EMI): A Detailed Analysis of Circular No. 08/2026-Customs

Extension of Deferred Payment of Customs Duty to Eligible Manufacturer Importers (EMI): A Detailed Analysis of Circular No. 08/2026-Customs

The Central Board of Indirect Taxes and Customs (CBIC), under the Ministry of Finance, Government of India, has issued Circular No. 08/2026-Customs dated 28 February 2026, extending the facility of deferred payment of Customs import duty to a new category of importers designated as Eligible Manufacturer Importers (EMI).

This reform marks a significant step toward trade facilitation, ease of doing business, and liquidity support for domestic manufacturers engaged in international trade.

1. Legislative and Regulatory Background

The facility is granted under the proviso to Section 47(1) of the Customs Act, 1962 and operationalized through the Deferred Payment of Import Duty Rules, 2016 (as amended).

Earlier, deferred payment was primarily available to Authorised Economic Operators (AEO). With Notification No. 12/2026-Customs (N.T.) dated 01 February 2026, the Government has expanded the benefit to Eligible Manufacturer Importers.

Effective Date:

The facility shall be available to approved EMIs from 01 April 2026.

Validity:
The scheme shall remain in force until 31 March 2028.

2. Objective of the Circular

The key objectives of the extension are:

• Expedited Customs clearance at Ports/Airports/ICDs
• Improved working capital management for manufacturers
• Encouragement for EMIs to obtain AEO T2/T3 accreditation
• Strengthening compliance-driven trade facilitation

The policy envisions that EMIs will transition toward higher AEO tiers, thereby integrating into a globally recognized trusted trade framework.

3. Who Qualifies as an Eligible Manufacturer Importer (EMI)?

To qualify as an EMI, an applicant must satisfy stringent operational, compliance, financial, and legal criteria.

A. Core Eligibility Conditions

An applicant must:

1. Be an Importer and Manufacturer
   • Importer as defined under Section 2(26) of the Customs Act.
   • Manufacturer under Section 2(72) of the CGST Act;

OR

1. • An importer sending inputs/capital goods to job workers under Section 143 of CGST Act.
2. Possess a Valid IEC

Issued by DGFT.

3. Meet Customs Footprint Requirement
   • Minimum 25 Bills of Entry/Shipping Bills in previous FY
   • Relaxed to 10 for MSMEs
4. GST Registration
   • At least one active GSTIN
   • Manufacturing activity declared in REG-01 (where applicable)
5. Turnover Threshold
   • Aggregate annual turnover exceeding Rs. 5 Crore in the last FY.
6. Business Continuity
   • Minimum two financial years of operations.
7. GST Compliance
   • All GSTR-3B returns filed.
   • No tax collected but unpaid.
8. No Legacy Tax Defaults
   • No unpaid dues under Central Excise or Service Tax laws.
9. Financial Solvency
   • Positive net worth.
   • Solvent for preceding two financial years.
   • CA Certificate mandatory.
10. Clean Legal Record

• No arrests or convictions under Customs, Central Excise, Finance Act, or GST laws.
• No pending prosecution.
• No prior rejection or suspension for false declarations.

Note: Existing AEO-T1 entities meeting the criteria may also apply.

4. Application Procedure

A. Online Registration

Applications can be filed from 01 March 2026 at:

www.aeoindia.gov.in
Under the tab: Eligible Manufacturer Importer

Applicants must submit:

• Appendix-I Application Form
• Supporting documents (Appendix-II)
• CA Certificate (Appendix-III format)

B. Approval Authority

The Directorate of International Customs (DIC), CBIC will scrutinize and approve eligible applicants.

Upon approval:

• EMI status is updated in the Customs Automated System.
• No further action required to activate deferred payment facility.

5. Operational Mechanism for Deferred Payment

Step 1: ICEGATE Registration

The EMI's nodal person must obtain ICEGATE login credentials via www.icegate.gov.in.

The nodal person will:

• Authenticate Bills of Entry
• Verify deferred payment requests
• Authorize transactions via OTP

Step 2: Indicating Deferred Payment

While filing the Bill of Entry:

• Select Flag “D” in Payment Method Column.

Authentication by nodal officer is mandatory before clearance.

6. Due Dates for Payment

As per Rule 4 of the Deferred Payment Rules:

EMIs may also pay earlier, at their convenience.

7. Monitoring and Compliance Oversight

• Commissioners can monitor deferred payment reports through ICES dashboards.
• Non-payment instances must be reported to DIC.
• DIC may suspend or revoke EMI approval upon ineligibility.

A dedicated helpline has been established:

• Email: [email protected]
• Phone: 011-23310014

8. Documentation Requirements

Key documents include:

• IEC Copy
• PAN Copy
• GST Registration Certificates
• GSTR-9C
• GST ITC-04 (if applicable)
• Audited Financial Statements (last two FYs)
• CA Certificate (with UDIN)
• Property holding documents
• Authorization letter

The CA Certificate requires certification of:

• Net worth
• Liquidity
• Current ratio
• Debt-equity ratio
• Solvency
• No insolvency proceedings

9. Strategic Significance of the EMI Scheme

1. Liquidity Enhancement

Deferred duty payment improves working capital cycles.

2. Faster Clearance

Reduced dwell time at ports improves supply chain efficiency.

3. Incentivized Compliance

Strict eligibility conditions reward tax-compliant businesses.

4. AEO Ecosystem Expansion

Creates a feeder pool for higher AEO accreditation (T2/T3).

5. Support to Manufacturing Sector

Aligns with “Make in India” objectives by strengthening import-linked manufacturing.

10. Conclusion

Circular No. 08/2026-Customs represents a calibrated policy intervention balancing facilitation with compliance safeguards. By extending deferred payment benefits to Eligible Manufacturer Importers, the Government has provided a structured pathway for compliant manufacturers to enhance operational efficiency and financial flexibility.

The scheme's time-bound nature (till 31 March 2028) encourages prompt adoption and gradual transition toward advanced AEO accreditation, reinforcing India's commitment to modern, technology-driven Customs administration.

For manufacturers engaged in regular imports, timely evaluation of eligibility and proactive application under the EMI scheme could translate into significant operational and financial advantages.

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