Step-by-Step Guide to Setting Up a MOOWR Unit in India

Introduction

What if you could delay paying import duties — and sometimes avoid them completely? That’s exactly what the MOOWR scheme offers.

The Manufacture and Other Operations in Warehouse Regulations (MOOWR), 2019, re-introduced by the Government of India, revamped the 1966 version to align with WTO norms. Unlike Advance Authorization (AA), EPCG, EOU, or SEZ schemes, MOOWR has zero export obligation.

It is open to any manufacturer or processor — small or large, domestic or global — with no restriction on location or investment size.

What the MOOWR Scheme Offers

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 Rs.1 crore, duty normally Rs.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 Rs.50 lakhs, deferred duty Rs.10 lakhs. Converted & sold in 3 months, saving Rs.15,000 in interest.

Packing Material: Imported worth Rs.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

1. File Bill of Entry for warehousing at import — no upfront duty.

2. Use imported & local inputs for production; pay GST on domestic purchases.

3. Declare input-output norms.

4. Job work allowed — goods must return within 1 year.

5. Exports require GST invoice, e-way bill, seal, and proof submission within 1 month.

6. For domestic sales, file separate Bills of Entry for each import consignment.

7. 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

1. Is MOOWR suitable for small businesses? Yes, MOOWR is open to all manufacturers, regardless of size or location.

2. Can MOOWR units sell entirely in India? Yes, 100% of production can be sold in the domestic market.

3. Do I need to renew my MOOWR license? No, once granted, the license is valid until cancelled or surrendered.

4. What happens to scrap/waste under MOOWR? Duty applies if cleared domestically, but is waived if exported.

5. Can capital goods be sold after use? Yes, but duty is payable on the full import value with no depreciation benefit.

6. 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.