Clarification on whether import IGST is covered under deferred payment facility for Eligible Manufacturer Importers (EMI)

[NYAYASETU LEGAL ASSOCIATES LLP]

Hi Folks,

I seek a clarification regarding the scope of the deferred payment facility extended to Eligible Manufacturer Importers under Circular No. 08/2026-Customs read with Notification No. 12/2026-Customs (N.T.).

As per the circular, the facility is described as deferred payment of Customs import duty for approved EMIs. However, at the time of import, in addition to Basic Customs Duty, IGST is also levied and collected through customs on the Bill of Entry.

In this background, we request clarification on the following:

1. Whether the deferred payment facility available to an EMI covers only Basic Customs Duty, or also includes:

   • Import IGST

   • Social Welfare Surcharge

   • Compensation Cess, wherever applicable

2. Whether, upon filing a Bill of Entry with the relevant deferred payment flag, the deferment applies to the entire duty liability reflected in the Bill of Entry, or only to selected customs duty components.

3. Whether any separate system advisory / ICEGATE instruction / implementation note has been issued clarifying the treatment of IGST under the EMI deferred payment mechanism.

[Sadanand Bulbule]

The deferred payment facility for Eligible Manufacturer Importers (EMI) covers the entire duty liability on the Bill of Entry-including Basic Customs Duty, SWS, IGST, and Compensation Cess-by treating the consolidated assessment as a single unit for deferment via the ICEGATE "Deferred" flag and OTP authentication.

For more specific details, contact the jurisdictional GST office.

[Shilpi Jain]

Section 47 under which this notification is issued also refers to import duty and there is no definition in that provision. Going by the context import duty should refer to all the duties payable on import. Thereby should cover all the duties you have referred.

[YAGAY andSUN]

• The EMI deferred payment facility is governed by the Deferred Payment of Import Duty Rules, 2016.

• In operational terms, the entire duty liability assessed in the Bill of Entry (BCD, SWS, IGST, and Compensation Cess, where applicable) is generally eligible for deferred payment.

• Filing the Bill of Entry with the deferred payment option results in deferral of the total duty payable, with settlement on the prescribed monthly due date.

• As of now, no separate ICEGATE or CBIC advisory specifically excludes Import IGST from the deferred payment mechanism.

[YAGAY andSUN]

1. Scope of Duty Covered Under the Deferred Payment Facility

The deferred payment facility granted to Eligible Manufacturer Importers applies to "customs import duty" payable under Section 47 of the Customs Act, 1962, and is operationalized through the Deferred Payment of Import Duty Rules, 2016. The expression "import duty" in this context is interpreted in the customs system to mean the aggregate duty liability assessed on the Bill of Entry, which is required to be discharged through the customs duty payment mechanism.

Accordingly, when goods are imported, the duty liability assessed in the Bill of Entry typically includes:

• Basic Customs Duty (BCD)

• Social Welfare Surcharge (SWS)

• Integrated Goods and Services Tax (IGST) on imports

• Compensation Cess, wherever applicable

Since Import IGST and Compensation Cess are collected at the customs stage through the Bill of Entry under Section 3 of the Customs Tariff Act, 1975, these levies form part of the total duty liability assessed by customs at the time of clearance. Consequently, under the deferred payment mechanism, the entire duty amount reflected in the Bill of Entry is generally covered for deferment, unless specifically excluded by system configuration or a subsequent instruction.

[YAGAY andSUN]

2. Treatment in the Customs System (Bill of Entry / ICEGATE)

Under the deferred payment framework, when an approved EMI files a Bill of Entry with the deferred payment option enabled, the customs system (ICES/ICEGATE) allows clearance of goods without immediate payment of the assessed duty. The liability appearing in the Bill of Entry is accumulated and becomes payable on the prescribed monthly deferred payment date under the Deferred Payment of Import Duty Rules, 2016.

Therefore, in practice, the deferment applies to the total duty amount assessed on the Bill of Entry, rather than being restricted only to Basic Customs Duty. Payment is made subsequently on a consolidated basis for all Bills of Entry returned for payment within the relevant period.

[YAGAY andSUN]

3. Clarification Regarding IGST

As of now, neither Circular No. 08/2026-Customs nor Notification No. 12/2026-Customs (N.T.) expressly carve out Import IGST from the deferred payment mechanism. The circular merely extends the facility of deferred payment of customs import duty to Eligible Manufacturer Importers and states that the scheme shall operate in accordance with the Deferred Payment of Import Duty Rules, 2016.

Further, no separate public system advisory or ICEGATE instruction has yet been issued specifically addressing the exclusion or separate treatment of Import IGST under the EMI deferred payment scheme. In the absence of such clarification, the prevailing interpretation is that the deferment mechanism applies to the entire duty liability assessed on the Bill of Entry, including IGST and other applicable levies collected through customs.

[Nash Industries I Pvt Ltd]

First this deferment scheme is already in vogue. It was available for AEO-T2 and T-3. which is extended to manufacturer importer for a period of 2 years within which they need to convert them into AEO-T2.

Deferment is not a concession or exemption. So part of deferment of duty is like EMI and has no meaning. So, deferment means entire duty. Further, duty deferment is to be seen more from EODB perspective and improve Operational efficiency.

Ramaswamy S

 

[Raghunandhaanan rvi]

Yes, it covers the entire duties, including IGST on imports. No exclusions were made either in the Rules or Circulars issued by CBIC in this regard.

AI Summary

Deferred payment of import duty for eligible manufacturer importers is treated as covering the full bill of entry liability, including IGST. Eligible Manufacturer Importers are discussed as being entitled to deferred payment of customs import duty under the Deferred Payment of Import Duty Rules, 2016. The commentary states that the deferment generally covers the entire duty liability assessed on the Bill of Entry, including Basic Customs Duty, Social Welfare Surcharge, Integrated Goods and Services Tax on imports, and Compensation Cess where applicable. It further notes that the Bill of Entry may be filed with the deferred payment option and that no separate public instruction is identified as excluding Import IGST from the mechanism.