Authorized Economic Operator Program

What is AEO (Authorized Economic Operator?)

AEO is facilitation scheme i.e. holder of this certificate is entitled for certain privilege, benefits and exemption on account of import and export, In India, AEO certification is Three-Tier AEO (T1, T2, T3).This three tier certification is launched by Indian Customs Circular No. 33/2016 dated 22th July, 2016 (in suppression of Circulars No. 42/2005 dated 24.11.2005- old ACP scheme and Circulars No. 28/2012-Customs dated 16.11.2012- old AEO programme).

Now, Old ACP and OLD AEO is merged and resulted into three certification (T1, T2, T3) for importer and exporter and one other certificate namely (AEO-LO certificate) will be issued for other than importer and exporter such as Logistics Providers, Custodians or Terminal Operators, Customs Brokers and Warehouse Operators.

What is deferred duty payment under customs?

Deferred duty scheme allow payment of customs duty post clearance of goods which obviate the need of payment of duty at the time of clearance of the goods, In terms of customs Notification No. 135/2016-Customs, Importers certified under Authorized Economic Operator programme as AEO (Tier-Two) and AEO (Tier-Three) are entitled for payment of duty under deferred payment scheme, means option of deferred payment is extended only to AEO-T2 and AEO-T3 certificate holder.

Rule 4 of the Deferred Payment of Import Duty Rules, 2016 notified vide Notification No. 134/2016-Customs (N.T.) dated 2nd November, 2016 read with Circular No. 52/2016, an eligible importer shall intimate intention to avail the benefit of deferred payment to the AEO Programme Manager with a copy to the Commissioner(s) of Customs having jurisdiction over the port(s) of clearance.

Due date for payment under deferred payment scheme (Rule-5 of Deferred Payment of Import Duty Rules, 2016 as amended vide Notification No. 28/2017-Customs (N.T.) dated 31st March, 2017.

Date of bill of entry Duty shall be paid
1st day to 15th day of any month. By the 16th day of that month
16th day till the last day of any month except march By the 1st day of the following month.
16th day till the 31st day of March By the 31st March.

How to file Bill of entry for availing the benefits of deferred Payment

The eligible importer who intends to make deferred payment shall indicate the same using flag "D" in the Payment Method column of Bill of Entry filed.

Who is entitled for AEO CERTIFICATION?

Anyone involved in the international supply chain that undertakes Customs related activity in India can apply for AEO status irrespective of size of the business. These may include exporters, importers, logistic providers (e.g. carriers, airlines, freight forwarders, etc.), Custodians or Terminal Operators, Customs House Agents and Warehouse Owners. Others who may qualify include port operators, authorized couriers, stevedores. The list is not exhaustive.

Small and medium scale enterprises who has filed 25 documents i.e. either Bills of Entry or Shipping Bills during the last financial year is also entitled for AEO.

AEO is applicable to OLD Company or new company

The applicant should have business activities for at least three financial years preceding the date of application.

Type & Applicability, Validity & renewal of AEO Certification

Types of Certificate Applicability Validity Time limit for submission of application for renewal before lapse of validity
AEO-T1Certificate Only Importer and Exporter can have T1, T2 & T3 certificate. 2 Year 3 Year
AEO-T2 Certificate    
AEO-T3 Certificate Applicant must have continuously enjoyed the status of AEO-T2 for at-least a period of two years preceding the date of application for grant of AEO-T3 status. 5 Year 90 Days
AEO-LO Certificate Other than importers and exporters, namely Logistics Providers, Custodians or Terminal Operators, Customs Brokers and Warehouse Operators. 5 Year 90 Days

Who is not entitled for AEO CERTIFICATION?

Businesses that are not involved in Customs related work / activities will not be entitled to apply, in general, banks, insurance companies, consultants and the like categories of businesses will not be eligible for AEO status.

AEO is branch wise or entity wise

AEO certification is entity wise not branch wise, location wise and GroupWise. If a group of company have 5 companies then all company will have to apply separately.

Main benefits of certificate under AEO scheme

Benefits AEO-T1Certificate AEO-T2 Certificate AEO-T3 Certificate
High level of facilitation Yes Yes Yes
Direct Port Delivery import/export container Yes Yes Yes
ID cards to authorized personnel for hassle free entry to Custom Houses, CFSs and ICDs. Yes Yes Yes
Separate space earmarked in Custodian’s premises Yes Yes Yes
Reduction on Bank Guarantee 50% reduction 75% reduction 100% reduction
Investigations, if any, would be completed, in six to nine months Yes Yes Yes
Dispute resolution within six months Yes Yes Yes
E-mail regarding arrival/ departure of the vessel carrying their consignments Yes Yes Yes
24/7 clearances on request at all sea ports and airports Yes Yes Yes
Seal verification/scrutiny of documents by Custom officers would be waived Yes Yes Yes
Deferred payment of Duty No Yes Yes
BEs/SBs will be processed on priority Yes Yes Yes
Faster completion of Special Valuation Branch (‘SVB’) Yes Yes Yes
Shorter cargo release time Yes Yes Yes
facility to paste MRP stickers No Yes Yes
access to their consolidated import/export data No Yes Yes
Paperless declarations with no supporting documents in physical form. No Yes Yes
Client Relationship Manager”(CRM at the level of Deputy / Assistant Commissioner available at port who will act voice of AEO holder Yes Yes Yes
Expedite refund of IGST - 45 Days 30 Days
No Merchant Overtime Fee (MOT) No Yes Yes

Benefits for AEO-LO certificate

Logistic Service Providers, Custodians or Terminal Operators, Customs Brokers, Warehouse Operators
  • Waiver of bank Guarantee.
  • Facility of Execution of running bond.
  • Exemption from permission in case of transit of goods.
  • Faster approval for new warehouses within 7 days
  • Waiver of solvency certificate.
  • Waiver of security
  • Waiver from fee for renewal of license.

To whom application to be made for certification and renewal

The application should be sent to the AEO Programme Manager, Directorate General of Performance Management, Customs & Central Excise, ‘D’ Block, I.P. Bhawan, I.P. Estate, New Delhi – 110002.

The Additional Director General, Directorate General of Performance Management, Customs & Central Excise, ‘D’ Block, I.P. Bhawan, I.P. Estate, New Delhi – 110002 will be the AEO Programme Manager and AEO Programme Team will comprise officers from the Directorate General of Performance Management and its regional offices.

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