Conversion of MOOWR Unit to EOU Unit

[CHICKMAGALUR SRIKANTHA]

An existing company operating under MOOWR scheme wish to switch over to EOU scheme. Whether the said company apply for an EOU license / permission to Development Commissioner, without canceling the MOOWR license. On receipt of the license /eou approval from DC, then the company wish to transfer the capital goods and materials imported under MOOWR to EOU unit under bond to bond transfer without payment of duty and without physical movement of the goods. Then MOOWR unit will surrender the license. 

In the said scenario, is it possible to apply for Eou status license while operating under moowr scheme till the eou license is obtained. the moowr unit and eou unit location is one and the same. 

[Sadanand Bulbule]

The company should first apply for EOU approval while holding MOOWR [Manufacture & Other Operations in Warehouse Regulations, 2019], then transfer all capital goods/materials through bond-to-bond transfer without physical movement, and finally surrender the MOOWR license after Customs reconciliation. This ensures seamless conversion without duty payment or disruption of operations.

 

[Shilpi Jain]

Practically this is possible only if you have 2 premises and you want to hold on MOOWR in the existing premises and for the new premises you are taking EOU.

HOwever, in the same premises, as I understand, practically it is not allowed to retain MOOWR and take EOU.

 

[Shilpi Jain]

Though what is the reason for moving from MOOWR to EOU?

Further to note that movement of goods from MOOWR to EOU is not bond to bond transfer. Moving goods to EOU will require filing of BoE for home consumption which will then require the MOOWR unit to pay off the BCD deferment.

Though this is not the intention of the scheme, a representation has to be made to the government in case this benefit is sought. You can consider this aspect.

AI Summary

Conversion from MOOWR to EOU requires EOU approval, customs reconciliation, and possible duty treatment on transfers. Apply for EOU approval while retaining the MOOWR licence, transfer capital goods and materials via bond-to-bond transfer without physical movement, complete Customs reconciliation, and then surrender the MOOWR licence. Note practical constraint that retaining MOOWR in the same premises while taking EOU is generally not permitted, and that Customs may require a Bill of Entry for home consumption with payment of deferred duty unless a government representation secures a different treatment.