(MOOWR)

MOOWR Scheme (Manufacture & Other Operations in Warehouse Regulations) – A Comprehensive Guide

The MOOWR scheme, introduced under Notification No. 69/2019-Customs (N.T.) dated October 1, 2019, by the CBIC (Central Board of Indirect Taxes & Customs), is designed to encourage domestic manufacturing by allowing duty deferment on imported inputs and capital goods stored in a bonded warehouse. It aims to bolster India’s position as a manufacturing hub and support initiatives like “Make in India.” 

1. 🔷 What Is the MOOWR Scheme?

Manufacture & Other Operations in Warehouse Regulations (MOOWR) is a regulatory framework under Section 65 of the Customs Act, 1962. It allows importers/manufacturers to import inputs and capital goods without paying customs duties upfront, provided they are warehoused and used for manufacturing or other operations within specified bonded units. Duties are postponed until the finished goods are either cleared for domestic consumption or exported.

Key characteristics include:

• Duty Deferment: No customs duties (Basic Customs Duty and IGST) or compensation  are charged at import if goods are warehoused under MOOWR 
• No Export Obligation: Unlike schemes like SEZ, EPCG, or Advance Authorization, MOOWR imposes no mandatory export requirements 
• Single License Validity: One-time customs license—no renewal required, valid until cancellation.
• Digital Compliance: Record-keeping and monthly filings are managed via digital systems upon entry and exit from the warehouse.

2. 🎯 Objectives of MOOWR

A. Strengthen Domestic Manufacturing

By liberalizing customs norms and simplifying registrations, MOOWR encourages companies to carry out manufacturing within India. Intensive duty deferment reduces production costs and boosts competitiveness. 

B. Ease of Doing Business

A single form for licensing, faster approvals, no export targets, and digital compliance promote efficiency and reduce red tape.

C. Support MSMEs

With no investment threshold or locational restrictions, MOOWR is accessible to MSMEs. This flexibility allows them to enter duty-benefit regimes early without major capex. 

D. Cash Flow and Working Capital Benefits

Deferred duties serve as working capital, reducing upfront expenditure. For exports, duties on inputs are refunded, improving liquidity. 

3. 🛠️ Key Features of MOOWR

4. ✅ Eligibility Criteria & Application Process

A. Who Can Apply?

Any business licensed under Section 58 (private bonded warehouse) can apply to operate as an MOOWR unit. 

B. What Operations Are Permitted?

• Manufacturing or simple operations like labeling, packaging, rework, testing, or assembly.
• No restriction on types of goods—except exclusions per Instruction No. 13/2022 Customs (e.g., solar units).

C. Application & Approval

1. Apply via the Invest India portal or directly to Customs.
2. Customs conducts site inspection (CCTV, fire safety). 
3. Approval granted with bonded license and insurance.

D. Warehouse Code Generation

Once approved, a unique warehouse code is assigned for tracking and duty deferment purposes.

5. 📑 Compliance, Record-Keeping & Audit

A. Registers to Maintain

• Bond Register tracking inward/outward movements.
• Input-output ledger for traceability of inputs and outputs. 

B. Monthly Returns

Submit digital monthly returns showing transactions for duty-deferred and duty-paid good. 

C. Annual Updates

Licenses require renewal of solvency certificates, insurance, and safety audit reports. 

D. Exit Procedure

1. Clear all warehouse inventory—either by exporting or paying duty domestically.
2. Submit final returns and close accounts.
3. Undergo final inspection before license surrender.

6. 💸 Duty Treatment & Cost Implications

A. Deferred Duties

No import duties paid till removal from the warehouse. On DTA clearance, duties apply only to imported inputs (excluding value addition). 

B. Exports

Duty on inputs is entirely remitted—goods exit duty-free. 

C. IGST & Compensation Cess

Current law allows full deferment, but recent amendments may require upfront payment of IGST & cess under Section 65A, from the Finance Act 2023

D. No Export Incentives

 MOOWR units are ineligible for RoDTEP refunds or all-industry export drawback rates

7. ⚙️ Comparison with Other Schemes

MOOWR stands out for its flexibility, especially for companies that don’t want export obligations or don’t qualify for higher incentives from other schemes.

8. 🏢 Who Benefits Most from MOOWR?

• Import-Intensive Industries: Electronics, auto components, pharmaceuticals. Duty deferment boosts margins.
• MSMEs: No investment thresholds or export obligations make it accessible. 
• Job-Work Models: Flexibly send inputs for external processing, then return. 
• Domestic Market Focused Firms: Duty only on imported content; value-addition remains duty-free

9. 🧭 Challenges & Recent Developments

A. Amendments via Finance Acts

• Budget 2024 introduced powers to exclude specific processes or goods from MOOWR. 
• Finance Act 2023 added Section 65A, requiring IGST/cess payment upfront in some cases.

These changes bring uncertainty, especially for units depending on deferred IGST with no duty charge mechanism clearly defined.

B. Operational Ambiguities

• Lack of clarity on used capital goods depreciation in domestic clearance. 
• Uncertainty over transfers between MOOWR units. 
• Integration issues with ICEGATE for filing returns.

10. ✅ Best Practices for MOOWR Units

• Stay updated on amendments and Gazette notifications restricting processes.
• Maintain meticulous warehousing records and monthly returns via digital ledger.
• Plan for duty payments in case of domestic clearance—ensure proper cash flow.
• Consult experts for sections 65A and customs duty structuring.
• Align internal SOPs with bonded warehouse regulations and safety/security standards.

11. 🧠 Future Outlook

MOOWR builds flexibility, cost-efficiency, and ease-of-doing-business aspects into India’s manufacturing landscape. With recent regulatory updates, optimal utility will depend on:

• Government clarity on the scope and excluded goods
• Streamlined compliance and digital filing portals
• Wider awareness among industry and customs officials
• Stakeholder dialogue to resolve operational grey areas

If managed intelligently, MOOWR can greatly benefit MSMEs and large manufacturers with import-heavy operations, reducing costs and enabling streamlined value-addition without export pressure.

12. 📝 Conclusion

The MOOWR Scheme is a powerful tool for businesses seeking cost-effective, duty-free manufacturing within India’s bonded warehouses. With its simplified licensing, broad eligibility, and flexible arrangements—combined with zero or minimal export obligations—it provides a competitive edge for import-intensive units, MSMEs, and job-work models.

However, the evolving regulatory environment—especially post-Budget amendments—requires proactive monitoring and strategic planning. Units must align internal processes, financial planning, and compliance to harness the scheme effectively.

🔗 Looking for Help?

Awat Logistics offers expert consulting and compliance support for MOOWR units. We help businesses:

• Navigate application & licensing
• Set up bonded warehouses and warehouse codes
• Implement compliance systems and monthly returns
• Plan for Section 65A, IGST, and duty deferment strategies
• Surrender licenses and exit seamlessly