Introduction
Under MOOWR, businesses can:
- Import capital goods and raw materials without paying customs duty upfront.
- Defer duty on raw materials until finished goods are sold in the domestic market.
- Save interest — no interest is charged on deferred duties.
- Avoid duty on:
- Raw materials used in exported goods.
- Capital goods re-exported after their lifetime.
- Defer/avoid duty on waste or scrap depending on whether it’s cleared domestically or exported.
Step-by-Step Process to Set Up a MOOWR Unit
Step 1: Check Eligibility
- Any manufacturer or processor can apply.
- Must obtain a Private Bonded Warehouse license (Section 58) and MOOWR operations permission (Section 65).
- No export obligation — 100% of sales can be in India.
Step 2: Register Your Entity
You need to be a registered Indian entity such as a Company, LLP, Partnership, or Proprietorship. Ensure you have:
- PAN, GST, and Importer Exporter Code (IEC).
Step 3: Prepare Premises & Documents
Get your site inspection-ready and documentation complete:
- Ground plan showing storage, production, office, entry/exit points.
- NOC / Fire & Safety Certificate.
- Age & construction details of the building + photos.
- Appointment of a Warehouse Keeper with digital signature.
- Security arrangements and contracts.
- Last 3 years’ financials & import history.
- Solvency certificate, insurance, list of directors, Aadhaar copies.
Step 4: Apply for Approvals
- File application under Section 65 via the Invest India portal.
- Apply for Section 58 warehouse license on ICEGATE.
- Submit supporting documents (incorporation, lease agreement, authorization, etc.).
- Customs will inspect and then issue approvals.
Step 5: Execute Bond & Security
- Submit Annexure C – General Bond (usually 3× estimated duty).
- Declare maximum duty liability.
- Provide bank guarantee/security, if required.
Step 6: Commence Operations
Once approved:
- Import raw materials and machinery duty-free.
- On exports, no duty payable.
- On domestic sales, pay deferred BCD & IGST at clearance.
Step 7: Maintain Compliance
- File monthly returns by the 10th.
- Maintain IT-enabled digital records.
- Keep separate inventory for domestic & imported goods.
- Follow FIFO method for tracking.
- Provide adequate facilities for Customs inspection.
- Affix signage showing it’s a Customs Bonded Warehouse.
Case Study: ABC Technologies
Machinery: Imported machinery worth ₹1 crore, duty normally ₹10 lakhs. With MOOWR, no upfront payment, saving ₹60,000/year in interest. If exported after 10 years, no duty is payable.
Raw Material: Imported raw material worth ₹50 lakhs, deferred duty ₹10 lakhs. Converted & sold in 3 months, saving ₹15,000 in interest.
Packing Material: Imported worth ₹10 lakhs. 70% used for exports — no duty payable. Only 30% used domestically attracted duty at clearance.
This example shows how MOOWR helps businesses save both cash and interest costs.
Key Compliance Requirements
- File Bill of Entry for warehousing at import — no upfront duty.
- Use imported & local inputs for production; pay GST on domestic purchases.
- Declare input-output norms.
- Job work allowed — goods must return within 1 year.
- Exports require GST invoice, e-way bill, seal, and proof submission within 1 month.
- For domestic sales, file separate Bills of Entry for each import consignment.
- Maintain records, segregate inventory, appoint warehouse keeper, and file returns monthly.
Special Scenarios to Watch
- Inter-Unit Transfers: Allowed between MOOWR units.
- Scrap/Waste: Duty payable if sold domestically; waived if exported.
- Goods from SEZs/FTWZs: Treated as imports; must follow bonding rules.
- Free Inputs: Must be declared at nominal value.
- Returns from Repairs/Testing: Treated as fresh imports or domestic inputs.
Challenges & Future Concerns
- Complex Compliance: Filing multiple Bills of Entry for DTA sales can be burdensome.
- No Depreciation: Duty is on full value when capital goods are sold in India.
- No RODTEP/Drawback: MOOWR exports don’t qualify for these benefits, reducing competitiveness.
- Policy Uncertainty: The Finance Act 2024 allows the Government to exclude certain goods/operations from MOOWR, creating long-term unpredictability.
Comprehensive Registration Checklist
- Applications under Sections 58 & 65
- Certificate of Incorporation & authorization letter
- Aadhaar copies of directors & list of directors
- Lease/ownership documents
- Ground plan with layout & access points
- Fire & Safety NOC
- Company solvency certificate
- Last 3 years’ financials & import history
- Appointment of Warehouse Keeper & specimen signature
- Security personnel details & contracts
- Photos & building details
- Annexure C – General Bond
- Declaration of maximum duty liability
- Insurance certificate
- IT-enabled inventory systems & compliance undertakings
FAQs
- Is MOOWR suitable for small businesses?
Yes, MOOWR is open to all manufacturers, regardless of size or location.
- Can MOOWR units sell entirely in India?
Yes, 100% of production can be sold in the domestic market.
- Do I need to renew my MOOWR license?
No, once granted, the license is valid until cancelled or surrendered.
- What happens to scrap/waste under MOOWR?
Duty applies if cleared domestically, but is waived if exported.
- Can capital goods be sold after use?
Yes, but duty is payable on the full import value with no depreciation benefit.
- Does MOOWR provide export incentives like RODTEP?
No, exports under MOOWR are not eligible for RODTEP or Drawback benefits.
Conclusion
The MOOWR scheme in India is a flexible, cash-flow-friendly option for businesses importing raw materials and machinery. It allows duty deferment, interest savings, and freedom from export obligations, making it especially attractive for domestic-oriented manufacturers.
While compliance can be detailed and some export benefits are unavailable, the working capital relief often outweighs these challenges. For companies with heavy import dependency, MOOWR can be a genuine game-changer.
Do you want to set up a MOOWR unit in India?
Book a 20-min consultation with us and let’s get started.