The MOOWR (Manufacturing and Other Operations in Warehouse) scheme is a CBIC-introduced initiative that allows businesses to import raw materials and capital goods duty-free for manufacturing or other operations within a customs-bonded warehouse, aiming to boost “Make in India”. It offers 100% duty deferment, no export obligation, and no time limits on storage.

In a simple term MOOWR is a easily compliance with a single application covering both warehouse licensing and manufacturing operations.

For enrolling into MOOWR Scheme, the proposer shall make an application through CBEC website (online) which are classified:

 

Part-I: Business Details covering Constitution of Business, Registered Office, Bank, Proprietor/Partner/ Director/ Authorized Person & Existing Manufacturing Set-up etc.

Part-II: Details of Proposed Facility covering WH licence if any already granted and whether the applicant is an authorized economic operator and goods propose to be manufactured including Security facilities.

Part-III: Applicant Details which ends with an undertaking.

Operative Portion: The issuance of Bonded Warehouse is falling under Sec.58 of Customs Act, 1962 read with Regulation 5 of Private Warehouse Licensing Regulations 2016., Vide Notification No.70/2016 Customs (NT) dated 14.5.2016. The said license permits for the establishment of Private Bonded Warehouse, where the dutiable goods (Capital Goods, Raw Materials) without the payment of Customs Duties.

The provisions for manufacture and other operations in Warehouse Regulations, 2019 are enumerated vide Notification No.44/2019-Cus (N.T) dated 19.06.2019 and Notn. 69/2019-Cus.(N.T.) dated 01.10.2019, Circular No.s36/2018-Customs dt. 18.10.18 and Circular No. 34/2019-Cus.dtr.0110.219 (as amended from time to time)

The stock details are required to be maintained as per the Notification No.34/2019-Cus(N.T.) dated 01.10.29 and the details are required to be submitted to jurisdictional Assistant / Deputy Commissioner

Documents Requirements:

To Apply the MOOWR Licence, the proposer shall submit/upload the following documents:

1. Company / Proprietor PAN Card
2. CIN
3. Aadhar Card for all Directors
4. Memorandum and Articles of Association (MOA)
5. GST Certificate
6. IEC Certificate
7. TAN Card
8. Lease Deed
9. Building Plan with necessary approvals
10. Project Report
11. Fire & Safety Certificate
12. DSC
13. Final Goods (proposed to be manufactured) with Process Flow Chart
14. Solvency Certificate issued by the Bank
15. Bank Account Details

Apart from the above, the proposer shall execute Certain Undertaking and Bond with the jurisdictional Customs Authority:

1. Undertaking and Indemnity for the liability if any arising on account of loss suffered in respect of Warehoused Goods due to Accident, Damage, Deterioration, Destruction of any other Un-Natural Cause during the receipts, storage, despatch and handling.
2. Undertaking on maintaining proper records, Input and Output norms for the proposed manufacture
3. Undertaking on indemnifying Duties, Interest, Fine and Penalty for the Warehoused goods without payment of duty as per sub-section (3) of Section 73 A.
4. Executing General Bond as per Sec. 69 of Customs Act,9162 and MOOWR, 2019 by a unit operating under Sec.65 covering:

• to comply with all the provisions of the Customs Act, 1962.
• to pay in the event of failure to discharge obligations payable as per Sec. 72 of Customs Act, 1962
• to pay all penalties and fines incurred for the contravention of the provisions of the Customs Act, 1962, CGST 2017.

Warehousing Bond:

Sec.59 of the Customs Act, 1962 provides that – the importer of any goods in respect of which a bill of entry for warehousing has been presented u/s 46 and assessed duty u/s 17 or sec.18 shall execute a bond in a sum of equal to thrice the amount of duty assessed on such goods.

Summary of Advantages:

Duty Free Import of Capital Goods& Raw Materials:

The biggest advantages in the MOOWR Scheme is Basic Customs Duty + IGST are deferred until the goods are cleared for home consumption.

Interest on Duty: In connection to the above. When the duty is deferred interest is applicable, if the goods are cleared for domestic slae after a certain period.

But, If the goods are exported, the duty is waived completely 

Raw Materials: On the other hand, for Raw Materials, customs duty is deferred until the finished goods are domestically sold

Further, if the Finished Products (FP) are exported, the deferred duty on the imported raw materials would be waived completely.

Period of which goods may remain warehoused:

The goods can remain in the warehouse till the expiry of one year from the date of warehousing and the Principal Commissioner of Customs may extend the Warehoused period for a further period of one year.

Clearance of warehoused goods for export

Any warehoused may be exported to a place outside India without payment of import duty.

Further, there can be no export obligation under this scheme and in-fact no net foreign exchange has been prescribed.

Transfer of goods from one warehouse to another:

The provision for the transfer of warehoused goods to another warehouse as per the Sec.67.

 

 

Clearance of warehoused goods for home consumption

Any warehoused goods can be permitted for the clearance of domestic needs, by way of filing a bill of entry for home consumption and an undertaking for payment of import duty, interest, fine and penalties.

As per Sec.15 of Customs Act, 1962 the rate of duty and tariff value for clearance of the goods from a bonded warehouse shall be the rate of duty and tariff value on the date on which a BoE for home consumption is presented u/s 68 of the Customs Act, 1962.

Job Work:

The scheme permits to send the goods for Job Work process; however the processed goods should come back within a year. Necessary job work intimation be given to the jurisdictional Customs Authority.

Concerns & Conclusion:

Although, there are few concerns like no depreciation could be claimed on the Capital Goods; besides disentitlement of RoDTEP and Drawback Claim. However, it would worthy to note that recently, RoDTEP per centage has been sharply reduced taking into consideration of US-Tariff Rates, which struck down by US-Supreme Court.

From the above, it would be certain that the MOOWR Scheme is having great advantage for the Manufacturers, to be proud of making “Made in India” goods, by availing Cost Advantages in term of deferral of Customs Duties and other several advantages as listed above.