EPCG Won’t Save You from Anti-Dumping Duty. MOOWR Will

Many importers realise this only after the duty challan is generated. You plan a capital goods import, opt for EPCG as a routine decision, and assume major duties are taken care of. But when Anti-Dumping Duty applies, the cash outflow can come as an unpleasant surprise. This single distinction between EPCG and MOOWR can significantly impact your working capital.

Why EPCG Falls Short When ADD Is Involved

The Export Promotion Capital Goods scheme has long been the preferred route for importing machinery. It offers exemption from Basic Customs Duty, IGST and Compensation Cess, making it attractive for export-oriented manufacturers. However, EPCG does not provide any exemption or deferment for Anti-Dumping Duty. If your capital goods attract ADD, the duty has to be paid upfront at the time of import, without any relaxation. For capital-intensive projects, this upfront payment can lock substantial funds and increase financing costs.

How MOOWR Changes the Equation

The Manufacturing and Other Operations in Warehouse Regulations operate on a completely different principle. Instead of exempting selected duties, MOOWR allows deferment of almost all customs duties. Under this scheme, capital goods can be imported into a bonded warehouse without paying Basic Customs Duty, IGST, Social Welfare Surcharge, Compensation Cess and even Anti-Dumping Duty at the time of import. The duty liability arises only when the goods are cleared for domestic use. Until then, there is no cash outflow towards customs duties.

Export-Oriented Manufacturers Gain the Most

The real strength of MOOWR becomes evident when goods manufactured using imported capital goods are exported. In such cases, the deferred duties never become payable. This means Anti-Dumping Duty, which would have been a sunk cost under EPCG, is completely avoided. For manufacturers importing ADD-heavy machinery and focusing on exports, this translates into a major working capital advantage rather than a marginal tax benefit.

The Cost of Choosing EPCG by Habit

Most importers choose EPCG because it is familiar and widely used. Over time, it has become a default option rather than a conscious choice. But familiarity should not replace financial analysis. Where Anti-Dumping Duty is applicable, EPCG can lead to avoidable upfront cash blockage. MOOWR, on the other hand, aligns duty payment with actual domestic consumption and business reality. In an environment where interest rates and liquidity matter, this difference can materially affect project viability.

What Importers Should Re-Evaluate Before the Next Import

Before finalising your next capital goods import, it is important to check whether Anti-Dumping Duty applies to the product and country of origin. If it does, MOOWR should be evaluated seriously instead of opting for EPCG by default. Compliance under bonded warehousing requires planning and discipline, but the cash flow benefits often outweigh the additional procedural effort.