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What is MOOWR Scheme and How Can You Benefit from It?

The Manufacturing and Other Operations in Warehouse Regulations (MOOWR) scheme was introduced by the Central Board of Indirect Taxes and Customs (CBIC) to strengthen the manufacturing sector, attract investments, and promote Make in India policies.

What is MOOWR Scheme?

The scheme essentially allows the manufacturers to utilize Customs bonded warehouses for their production or other operations. The manufacturers are empowered with deferred import and export duty on inputs and goods. However, if the product is distributed in the domestic market, you need to pay the deferred import duties.

Subject to manufacturer status and liabilities, to obtain a MOOWR license:

  • You must have been granted a license for the Warehouse under section 58 of the Customs Act.
  • You must apply for a license to operate a warehouse under section 58 and obtain permission for manufacturing and other operations in the warehouse under section 65.
  • You have to maintain finances, receipts, and inventory in digital form and submit them to the bond office on a monthly basis.
  • Notify the Principal Commissioner about any critical changes in input-output norms.

Benefits of MOOWR Scheme

Deferred Duty on Import of Goods: Under the MOOWR scheme, as a manufacturer, the duties on the import of physical goods for raw materials are deferred. In case the products are exported, the duties are waived altogether. However, if the products are sold in the domestic market, you have to pay the duties.

Deferred Duty on Capital Goods: Until the capital goods are cleared from the bonded facility, the duties are deferred. Capital goods include machinery, tools, and other tangible items that help you sustain your operations.

Seamless Warehouse Transfer: If you ever need to transfer your bonded warehouse to a different location, it can be done seamlessly and without any payment of duty. But you must transfer the warehouse from one bonded facility to another. If a new owner is involved in the transfer, they will be liable to pay the duties.

No Geographical Obligations: You can set up your warehouse anywhere in India subject to municipal regulations. Customs or any other department doesn’t interfere with your choice of location. However, there are a few minimum requirements like boundaries, gates, and access control, that a manufacturer needs to comply with.

No Physical Controls by Customs: Your warehouse is just bonded to Customs. The physical operations and control is still your responsibility. Your manufacturing and other operations aren’t supervised or controlled by the Customs.

No Market Control: There are no export obligations in place to obtain the MOOWR scheme. You can sell 100% of your products in the domestic market, or export it all. The difference is in the waiver of import duties. In case the majority of your products are exported, this scheme is a great approach to secure business capital.

How Can A V International Help?

We thrive on helping our clients fulfill the prerequisites of setting up a warehouse to apply for the MOOWR scheme. As a few physical regulations are mandatory and the application process is somewhat detailed, we ensure that our clients are prepared and updated for inspections and verifications.