CBIC cuts paperwork in deferred customs duty scheme to boost MSME participation and ease cash flow

New Delhi: The central board of indirect taxes and customs (CBIC) is cutting paperwork and starting outreach programmes to get more manufacturers, particularly MSMEs, to use its deferred customs duty scheme, after a disappointing fewer than 1,000 businesses enrolled after its launch in the beginning of the fiscal in April.

The board has reduced the number of documents required under the Eligible Manufacturer Importer (EMI) scheme from 10 to three, effective September 15, and pared back the data applicants must submit. The CBIC will now conduct outreach programmes and handhold MSMEs on the scheme, a senior CBIC official said. "The scheme has not taken off the way we had envisaged," the official said, adding that simplified documentation and greater awareness should improve acceptance.

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Introduced on April 1 under the 2026-27 Union Budget, the EMI scheme allows eligible manufacturers to clear imported goods without paying customs duty upfront and pay in monthly tranches. The facility, available till March 31, 2028, is to ease manufacturers' cash flows and working-capital requirements.

The documentation changes followed representations from trade seeking a reduction in the compliance burden. CBIC said relevant particulars can now be verified through backend IT systems, reducing the need for applicants to furnish documents manually.

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The renewed push comes as the customs administration seeks to move towards a more technology-led, risk-based system.