MOOWR Scheme Explained: Unlocking the Potential of Manufacturing in India

November 28, 2024

What is MOOWR?

The Manufacture and Other Operations in Warehouse Regulations (MOOWR), 2019, is a scheme introduced under Section 58 and Section 65 of the Customs Act, 1962. It was designed to boost the Make in India initiative by allowing businesses to manufacture and operate in a customs-bonded warehouse. This scheme enables the import of raw materials and capital goods with customs duty deferment and no interest liability, significantly improving the ease of doing business.

Salient Features of MOOWR

• Customs Duty Deferment: Businesses can import raw materials and capital goods without paying customs duty upfront.
• Duty Remission on Export: The duty on imported inputs is waived if finished goods are exported.
• No Investment Threshold: There is no minimum investment requirement to set up a MOOWR unit.
• No Export Obligation: Businesses are not required to maintain a specific export percentage.
• Seamless Warehouse-to-Warehouse Transfer: Goods can be transferred between MOOWR warehouses without duty payments.
• No Physical Control by Customs: Businesses can appoint their warehouse keeper.
• Ease of Compliance: A single digital account streamlines processes.
• GST Compliant Procurement: Goods from the domestic market can be used for manufacturing.
• No Interest on Duty
• Reducing the burden on Working Capital

Eligibility Criteria

• Any company registered in India can apply.
• Companies can apply for a combined license for both warehousing and manufacturing (under Sections 58 and 65).
• Existing Domestic Tariff Area (DTA) units can convert to MOOWR.
• There are no restrictions on the geographical location of the warehouse.

Compliance Requirements

• Basic Documents:
  • IEC Certificate, GST Certificate, PAN Card, Certificate of Incorporation
  • MOA, AOA, UDYAM Certificate (if available), Factory License
  • AEO/EHC Certificate (if available), ITRs and balance sheets for the last 3 years
  • Lease Deed/Ownership Proof, Company Profile, Details of Directors
  • List of import products and a manufacturing flowchart
• Compliance Documents:
  • General Continuity Bond & Indemnity Bond
  • Fire Security Audit Certificate, Insurance Policy 
  • Warehouse Keeper Appointment Letter & Experience Certificate
  • Site Plan, Security & Surveillance Compliance
• Post-License Compliance:
  • Annual renewal of insurance and solvency conditions
  • Monthly stock report submission

Summary

The MOOWR scheme is a game-changer for manufacturers, providing a duty deferment system with no interest liability, reducing the burden on working capital. With no export obligations or investment threshold, businesses enjoy flexibility and liquidity, making India an attractive hub for manufacturing. The scheme is particularly beneficial for businesses aiming for cost efficiency, regulatory ease, and improved global competitiveness.