Clear now, pay later: Unlocking cash flow for eligible manufacturer importers in India

Decoding the scheme

The scheme represents a progressive step towards trade facilitation by extending the deferred duty payment benefit beyond entities holding Authorized Economic Operator (AEO) status to a broader category of eligible manufacturing importers.

Under this framework, EMIs are permitted to defer the payment of customs duties rather than settling them at the time of import clearance. For a manufacturing business, this mechanism can significantly enhance working capital efficiency and cash flow management.

This reform not only strengthens the ease of doing business for manufacturers engaged in imports but also supports India’s broader push towards boosting domestic manufacturing and export competitiveness.

Eligibility criteria for availing the deferred customs duty payment facility

• The importer should be engaged in manufacturing activities or should supply imported inputs or capital goods to job workers for job work in accordance with the provisions of the GST law.
• The importer must have a valid Import Export Code (IEC) and should have at least one active GST registration.
• The importer should have filed 25 or more import/export documents (Bills of entry/Shipping Bills) in the preceding financial year. For MSME applicants, this requirement is relaxed, and they are required to have filed a minimum of 10 such documents in the same period.
• The applicant must have at least one active GST registration in which the nature of business is declared as “factory” or “manufacturing.” In cases where the applicant is not directly engaged in manufacturing but sends inputs or capital goods to a job worker without payment of tax, the relevant active GSTIN of the applicant must have filed the last two half-yearly GSTR ITC-04 returns.
• The annual aggregate turnover of all GST registrations linked to the same PAN should exceed INR 5 crore in the preceding financial year.
• The applicant must have a minimum business operation for two years.
• The applicant must have filed all applicable GST returns and should not have any instances of tax collected but not deposited under the GST, Central Excise, or Service Tax laws.
• The importer must have been financially solvent during the preceding two financial years, and such solvency must be certified by a practicing Chartered Accountant.
• The applicant should not have any pending prosecution or conviction proceedings under Customs, GST, or other allied laws, and must not have any prior instances of rejection or suspension of EMI status due to false declarations or submission of forged documents.

Note – Existing AEO-T1 entities who meet the above eligibility criteria shall also be eligible to apply under this scheme.

Timeline of the EMI scheme:

• This facility would be operational from 01 April 2026 to 31 March 2028.

Why the EMI scheme is a smart choice for importers

• Deferred Payment of Customs Duty – Eligible manufacturers can defer the payment of customs duties on imported goods instead of paying them at the time of import. The duty can be paid at a later prescribed date, improving cash flow management.
• Faster Customs Clearance – Facilitates quicker clearance of imported goods, reducing delays at ports and enabling smoother supply chain operations for manufacturers.
• Ease of Doing Business – By reducing the immediate financial burden and simplifying duty payment procedures, it enhances ease of doing business for manufacturers engaged in imports while allowing them to retain working capital for a longer period, which can be effectively used for operational and production activities.
• AEO Advancement – Supports the AEO scheme by helping EMIs upgrade to AEO‑T2/T3 accreditation, thereby unlocking higher levels of customs facilitation and trade benefits.

How we can assist?

• Assessment of eligibility to determine whether the business qualifies as an Eligible Manufacturer Importer.
• Preparation and filing of EMI applications before the Customs authorities.
• Assistance with ICEGATE registration and CA solvency certificate.
• Analysis and advisory support for upgrading from AEO T1 to AEO T2/T3.

Advise on ongoing compliance under Customs, GST, and allied laws, helping prevent issues such as pending prosecutions, duty defaults, or EMI status suspension.