In today’s business environment, ease of doing business and better cash flow are key priorities for manufacturers and importers. The EMI Scheme has been introduced to support the Make in India initiative by reducing the burden of upfront customs duty and simplifying compliance requirements.
One of the major challenges for businesses is the blockage of working capital due to immediate duty payments. The EMI Scheme helps address this by allowing deferred payment of customs duty, thereby improving liquidity and operational efficiency. At the same time, it also encourages businesses to move towards higher compliance standards, such as AEO certification.
This article provides a simple overview of the EMI Scheme, covering its benefits, eligibility, and key practical aspects to help businesses understand and evaluate its applicability.
Why EMI Scheme?
- It was introduced to support Make in India by improving ease of doing business
- Lowering the cost of compliance.
- Increasing cash liquidity.
- Encouraging transition to AEO
Who is eligible?
- Importers and manufacturers.
- Importers who send goods to job workers for manufacturing.
What is the validity of the EMI Scheme?
The EMI Scheme is valid for a limited period up to 31.03.2028. This limited period acts as a transition window to encourage manufacturers to adopt higher compliance standards and obtain AEO certification for continued benefits.
Eligibility Criteria:
- Annual aggregate turnover of Rs. 5 crore or more in the last financial year.
- Valid Importer Exporter Code (IEC) issued by DGFT.
- Nature of business activity as “factory/manufacturing” in GST REG-01.
- Active GST number (job worker should also have an active GSTIN).
- Business is in existence for at least two financial years (based on GST registration).
- All GSTR-3B have been filed for all active GSTINs.
- The entity should be solvent during the 2 financial years preceding the date of application.
- No instances of duty collected but not deposited with the Govt.
- Applicant, Proprietor, Partners, or Board of Directors must not have been arrested or convicted for any offence under any law, and no prosecution proceedings should be pending.
- EMI application should not have been rejected in the past due to false information or submission of forged documents.
- CA certificate for solvency and plant & machinery installed in the factory.
Minimum Exim Docs Previous Financial Year:
| Sr No. | Category | Shipping Bills or Bill of Entries |
| 1 | MSME | 10 |
| 2 | Others | 25 |
Duty Deferment:
| Sr. No. | Month | Period of Bill of Entry | Due Date of Payment |
| 1 | March | 1st to l last Day of the Month | 1st Day of the Next Month |
| 2 | Others | 1st to 31st March | 31st March |
Frequently Asked Question (FAQs):
Q1: Can a trader and manufacturer claim the benefit of the EMI scheme?
Ans: No.
Q2: Can an eligible manufacturer/importer claim the benefit of duty deferment under the EMI scheme after 31.03.2028?
Ans: No, the benefit under the EMI scheme is available only till 31.03.2028. However, thereafter, the applicant may continue to avail similar benefits by obtaining AEO T2 status.
Q3: Are existing AEO-T1 entities eligible?
Ans: Yes, existing AEO-T1 entities can apply if they meet the eligibility criteria for the EMI scheme.
Q4: Under which zone should an applicant register under the EMI scheme?
Ans: All registrations under the EMI scheme are filed in the DIC Zone by default. After scrutiny and satisfaction of eligibility conditions, the designated officer of the Directorate of International Customs (DIC), CBIC shall approve the application.
Q5: Is an applicant required to submit any physical documents along with the online application?
Ans: The applicant is not required to submit any physical documents or make any visits to any office. The application process is completely online.
Q6: Will any notice be issued before rejection of an application?
Ans: No. If any of the eligibility criteria is not met, the application shall be rejected, and no notice will be served prior to such rejection. However, an intimation will be sent to the registered email ID after rejection.
Q7: Is there any fee for applying for the scheme?
Ans: No fee is required for registration/submission of the application.
Q8: Whether any bond and/or bank guarantee (BG) is required to be submitted?
Ans: No bond or BG is required to be submitted by the applicant.
Q9: Is separate approval required for each Customs station?
Ans: No, the approval is valid for all Customs stations.
Q10: Can manufacturer-importers use deferred duty payment selectively for some consignments and transactional payment for others?
Ans: Yes, they may choose deferred or transactional payment of Customs duty on a Bill of Entry as per their requirement/discretion.
Q11: Is payment of IGST also covered under the deferred duty payment scheme?
Ans: Yes, payment of IGST is also covered under the deferred duty payment scheme.
Q12: Whether this deferred payment facility applies to DTA clearances from bonded warehouses under MOOWR (Section 65)?
Ans: The facility of duty deferment for EMIs, based on provisions under Section 47(1), is not available for ex-bond clearance of goods for home consumption (no such provision under Section 68).
Q13: If an importer anticipates inability to pay by the due date, can an extension be sought?
Ans: No extension is provided for duty payment. However, duty along with applicable interest can be paid after the due date.
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Disclaimer: This document is prepared solely for general knowledge and educational purposes. It is intended to provide a broad understanding of the EMI Scheme and related provisions. The contents should not be construed as legal, tax, or professional advice. Readers are advised to consult their professional advisors before taking any action based on this information.
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