Deferred Customs Duty for Manufacturers: EMI Scheme Takes Effect from 1 April 2026

 In a significant move to ease working capital pressures for manufacturers, the Central Board of Indirect Taxes and Customs (CBIC), vide Circular No. 08/2026-Customs dated 28.02.2026, has extended the facility of deferred payment of Customs import duty to a new category of importers termed Eligible Manufacturer Importers (EMI), effective from 1^st April 2026. Under this framework, eligible importers can clear goods without upfront payment of Customs duty and instead discharge the duty liability on a consolidated monthly basis, thereby enabling more efficient cash flow management. This reform announced as part of the Union Budget 2026–27, is governed by the Deferred Payment of Import Duty Rules, 2016, is also aimed at expediting Customs clearance of imported goods at ports, airports, and inland container depots.

Under this facility, duty is payable on a consolidated monthly basis by the 1^st day of the following month for goods cleared during any month other than March, and by 31^st March for goods cleared during March month. EMIs also have the flexibility to pay the duty at any time before the due date. To avail the facility, the EMI must indicate its intent for deferred payment by selecting flag ‘D’ in the payment method column of the Bill of Entry, which is then authenticated by the designated nodal person through ICEGATE using a one-time password.

The EMI Scheme is designed as a trust-based facilitation mechanism to reward compliant manufacturers with procedural ease, while encouraging them to progressively adopt higher compliance standards. Approved EMIs are expected to obtain AEO-T2 or AEO-T3 accreditation within the validity period of the scheme, which would entitle them to enhanced facilitation, priority treatment, and a wider set of benefits under the Authorised Economic Operator programme. CBIC has also indicated that the benefits available to AEO-accredited entities are likely to be expanded further.

This scheme holds significant promise for a wide cross-section of Indian businesses. The facility is available not only to large manufacturers but also to MSMEs (with relaxed eligibility thresholds), importers engaging job workers under Section 143 of the CGST Act, and existing AEO-T1 entities. For businesses importing goods for manufacturing, whether directly or through job workers, this could translate into a meaningful improvement in cash flow and operational efficiency.

While pure trading entities remain outside its scope, the scheme offers a strong value proposition for manufacturing importers through improved working capital efficiency and smoother cash-flow management. At the same time, it serves as a forward-looking policy tool, encouraging participants to strengthen governance standards and move towards AEO accreditation. In this backdrop, businesses that are not yet part of the AEO framework should take a fresh look at their eligibility and internal readiness and evaluate whether they can practically leverage this facility. With relatively accessible entry thresholds and clear operational benefits, the scheme presents a timely opportunity to strengthen compliance systems while unlocking tangible trade facilitation advantages. It is, therefore, a development that deserves immediate and considered attention.