CBIC Exempts Merchant Overtime Charges for Cruise Passengers

“Indirect Tax I Indirect Tax Litigation I Customs & FTP I Central Licensing I Arbitration I Advisory”

Dated: 16.06.2026

CBIC Exempts Merchant Overtime Charges for Cruise Passengers

The Government of India has announced a significant policy change aimed at enhancing the experience of international cruise passengers and supporting the growth of cruise tourism in the country. Through Circular No. 27/2026-Customs, the Central Board of Indirect Taxes and Customs (CBIC) has exempted Merchant Overtime (MOT) charges for customs clearance of cruise passengers and their baggage at designated ports.

What Are Merchant Overtime (MOT) Charges?

Merchant Overtime charges are fees levied for services rendered by Customs Officers outside normal working hours or on holidays. These charges are typically applicable when customs services are required beyond standard office timings, such as during late-night or early-morning cruise arrivals and departures.

Background and Rationale

Stakeholders including the Ministry of Ports, Shipping & Waterways (MoPSW), Cruise Bharat Mission, and other industry representatives raised concerns about the impact of MOT charges on the cruise sector. They highlighted that these additional costs could deter cruise lines and passengers, making Indian ports less competitive compared to global counterparts.

The CBIC reviewed these representations and recognized the need for a uniform, facilitative approach to support the cruise industry. The exemption aligns with the government’s broader objective to promote ease of doing business and enhance the attractiveness of Indian ports for international cruise liners.

Key Highlights of the Circular

Exemption Scope: No MOT charges will be levied for customs clearance services provided to international cruise passengers and their accompanied baggage at customs locations notified for 24×7 operations.
Uniform Implementation: The exemption applies uniformly across all designated cruise ports, ensuring consistency and predictability for cruise operators and passengers.
Trade Facilitation: This measure is explicitly aimed at facilitating cruise operations, reducing costs, and streamlining passenger movement through Indian ports.

Impact on Cruise Tourism

Cost Savings: Cruise operators and passengers will benefit from reduced operational costs, making Indian cruise itineraries more attractive.
Enhanced Competitiveness: By removing MOT charges, Indian ports can better compete with international cruise destinations.
Passenger Experience: Faster and more efficient customs clearance processes will improve the overall experience for international travelers.

Implementation and Compliance

All Principal Chief Commissioners, Chief Commissioners, and other relevant customs authorities have been directed to implement this exemption at their respective ports. The move is expected to be welcomed by the cruise industry and is a step forward in positioning India as a preferred cruise destination.

This policy change reflects the government’s commitment to supporting tourism, simplifying procedures, and fostering a business-friendly environment at Indian ports.

In case you face any issues related to Indirect Tax-Customs, GST, Foreign Trade Policy (FTP), Arbitration matters and Central Licensing and related advisory matters in India then please feel free to get in touch with SJ EXIM Services.

We offer Legal advice and litigation support in matters related to Indirect Tax-Customs, FTP, other Indirect Tax matters & Arbitration law, all sorts of Central licensing and related matters. Come and explore the new way of doing business with us!

Source: CBIC, Ministry of Finance, Govt. of India

Disclaimer

Handy Download:

Customs CircularDownload

Connect with us for more-

@ Team S J EXIM SERVICES, New Delhi, IN

CP: Ms. Shubhra Jha, Founder

Tel: +91-11-4999 2707 I +91-9999005693

Web: www.sjexim.services

EMAIL: operations@sjexim.services I shubhra@sjexim.services

Facebook: www.facebook.com/sjeximservices

LinkedIn: https://www.linkedin.com/company/90794255/admin/feed/posts/