For most manufacturers, customs duty is paid at the worst possible moment — the instant goods land, long before those raw materials become finished products and even longer before a customer pays. That single timing mismatch ties up working capital on every consignment. The CBIC's new EMI scheme is designed to fix exactly that, by letting eligible importers clear their goods first and pay the deferred customs duty later, on a monthly basis.
Announced in the Union Budget 2026-27 and notified through CBIC Circular No. 08/2026-Customs dated 28 February 2026, the Eligible Manufacturer Importer (EMI) scheme is live from 1 April 2026 and runs until 31 March 2028. If you import raw materials, components or capital goods regularly, it can meaningfully improve your cash-flow predictability. Here is how it works and whether your business qualifies.
What is the EMI scheme?
EMI stands for Eligible Manufacturer Importer. The scheme extends the existing Deferred Payment of Import Duty Rules, 2016 to a new category of compliant manufacturers. In plain terms, an approved EMI can clear imported consignments at the port, airport or inland container depot without paying customs duty at the time of clearance, and instead settle the accumulated duty in a single monthly payment.
It is a trust-based facilitation measure: in exchange for a strong compliance and financial track record, the customs department lets you defer the cash outflow. The goal is to ease working-capital pressure on manufacturers, speed up clearances, and deepen participation in the Authorised Economic Operator (AEO) programme.
Instead of paying duty consignment by consignment, an approved EMI pays it once a month — turning dozens of cash outflows into a single, predictable settlement.
How the deferred payment mechanism works
Once approved, you no longer pay duty transaction by transaction. The shift is from transaction-level payment to periodic settlement, which improves cash-flow predictability and reduces the immediate liquidity hit at the point of import.
The payment schedule is fixed and simple:
- For goods cleared between the 1st and the last day of any month (except March), the deferred duty is payable by the 1st of the following month.
- For goods cleared during March, payment is due by 31 March.
You may always pay earlier if you wish. Customs tracks the deferred liability through its ICES dashboards, and jurisdictional Commissioners monitor timely payment — so the facility rewards discipline, not delay.
Who is eligible for the EMI scheme?
This is the part most businesses get wrong, so read it carefully. The benefit is available only to financially sound, compliant importers that meet every one of the following conditions:
- Business status: You must qualify as an importer under the Customs Act, 1962 and be a manufacturer under the CGST Act. Non-manufacturers can still apply if they send imported inputs or capital goods to a registered job worker under Section 143 of the CGST Act.
- Registrations: A valid Importer Exporter Code (IEC) from DGFT and at least one active GST registration that declares "factory/manufacturing" as the nature of business.
- Import activity: At least 25 Bills of Entry or Shipping Bills filed in the previous financial year. For MSMEs, this is reduced to just 10.
- Turnover: Aggregate annual turnover above INR 50 million (Rs 5 crore) across all GSTINs linked to your PAN in the preceding financial year.
- Business continuity: At least two financial years of operations before applying.
- Compliance and solvency: All GSTR-3B returns filed, no record of collecting tax without depositing it, demonstrated financial solvency for the past two years, and not under insolvency or bankruptcy proceedings. A Chartered Accountant's certificate of solvency (in the format at Appendix III of Circular 08/2026) is mandatory.
- Clean record: The applicant and its key managerial personnel must have no convictions or pending prosecutions under Customs, GST or Excise law.
A point MSMEs should note: you are eligible, with the relaxed 10-document threshold, provided you are registered on the Udyam Portal. Existing AEO-T1 entities, including MSMEs, may also apply if they meet the conditions.
Not sure whether your business clears every one of these conditions? Send us your IEC, GST and import details for a free EMI eligibility check before you apply — book a quick consultation or submit the enquiry form.
How to apply for the EMI scheme
The process is fully electronic. Applications opened on 1 March 2026, and the route is straightforward:
- Apply on the AEO portal. File online at the AEO portal (aeoindia.gov.in) under the "Eligible Manufacturer Importer" tab. Attach the supporting documents, including the CA solvency certificate.
- Approval by DIC. The Directorate of International Customs (DIC), CBIC reviews the application. On approval, your EMI status is updated automatically in the Customs Automated System — no further procedural steps are needed for the facility to go live.
- Set up ICEGATE authentication. Nominate a nodal person who obtains an ICEGATE login and authenticates customs transactions on your behalf.
- Flag each Bill of Entry. When filing, select the deferred payment option (flag "D") and complete OTP-based authentication. Clearance under the deferred mechanism is granted only after authentication, and multiple Bills of Entry can be authenticated together.
Because the documentation — particularly the CA certificate and the GST/turnover evidence — has to be exactly right, this is an area where professional help pays for itself. A rejected or incomplete application simply delays the cash-flow benefit you are after.
The benefits, and the AEO upside
The headline benefit is working capital: deferring duty from the day of import to a monthly settlement frees up cash on every consignment and makes outflows predictable. For a manufacturer importing regularly, that is a structural improvement, not a one-off saving.
There is a second, longer-term benefit. The EMI scheme is built as a stepping stone within the AEO programme. During the scheme's validity, approved EMIs are expected to progress to AEO-T2 or AEO-T3 status, which unlocks assured facilitation, reduced inspections, priority clearance and a widening set of AEO benefits. In other words, joining the scheme also puts you on the path to faster, lower-friction customs treatment overall.
What to watch out for
The facility is a privilege tied to continued compliance. If an approved EMI defaults on payment or stops meeting the eligibility conditions, DIC and CBIC can suspend or revoke the approval. Late monthly payments, lapsed GST filings or a deterioration in financial standing can all put your status at risk. Treat the monthly settlement as a hard deadline and keep your compliance current, and the scheme works entirely in your favour.
If you are already managing your imports through a customs house agent, loop them in early — the deferred-payment flag and ICEGATE authentication change how each Bill of Entry is filed. It is also worth pairing the application with a quick trade compliance review so nothing in your GST or customs history triggers an avoidable rejection.
Frequently asked questions
What is the EMI scheme in customs?
The EMI (Eligible Manufacturer Importer) scheme is a CBIC facility, effective 1 April 2026, that lets approved manufacturer importers clear imported goods without paying customs duty upfront and instead pay the duty on a consolidated monthly basis under the Deferred Payment of Import Duty Rules, 2016.
Are MSMEs eligible for the EMI scheme?
Yes. MSMEs registered on the Udyam Portal can apply, and they benefit from a relaxed requirement — only 10 Bills of Entry or Shipping Bills in the previous financial year, instead of 25. They must still meet the turnover, solvency and compliance conditions.
What is the minimum turnover to qualify?
The aggregate annual turnover across all GSTINs linked to the applicant's PAN must exceed INR 50 million (Rs 5 crore) in the preceding financial year.
Can new businesses or startups apply?
Only if they have been operational for at least two financial years and meet the import-activity, turnover and compliance criteria. Brand-new entities cannot apply yet.
Do I need a Chartered Accountant's certificate?
Yes. A CA certificate confirming financial solvency, in the prescribed format (Appendix III of Circular 08/2026), is mandatory. A self-declaration is not accepted.
When is the deferred duty actually payable?
For goods cleared between the 1st and last day of a month (except March), duty is due by the 1st of the following month. For goods cleared in March, it is due by 31 March. You can always pay earlier.
How do I apply, and by when?
Apply online through the AEO portal (aeoindia.gov.in) under the "Eligible Manufacturer Importer" tab. Applications opened on 1 March 2026, and the scheme runs until 31 March 2028.
What happens if I miss a monthly payment?
Repeated default or failure to meet eligibility conditions can lead CBIC to suspend or revoke your EMI approval, after which you return to paying duty at the time of each clearance.
The bottom line
For a compliant, growing manufacturer, the EMI scheme is one of the most useful customs reforms in years — it converts a recurring cash-flow drag into a predictable monthly settlement and sets you on the path to AEO benefits. The catch is the paperwork: the eligibility conditions are strict and the CA certificate and compliance evidence must be flawless. Get the application right the first time and the working-capital benefit starts flowing from your very next consignment.
Want to know if you qualify — and have the application handled end to end? We will assess your eligibility for free, prepare the documentation, and guide you through the AEO portal and ICEGATE setup. Book a free EMI eligibility consultation or submit the enquiry form and we will take it from there.
