taxation and GST advice regarding equipment sales under a MOOWR license for a customer's greenfield project in Aurangabad

[Seema Dwivedi]

We are offering our welding machines to one of our customers in Maharashtra (Aurangabad).

Their main plant is in Brazil and a new green field project is under construction.

Customer mentioned that they are procuring all the equipment necessary for the plant under MOOWR license where ZERO Duty is applicable.

Please could you review and advise whether this transaction is similar to HSS Sale.

What is a MOOWR License?

• MOOWR stands for Manufacture and Other Operations in a Warehouse. 
• It combines a private warehouse license under Section 58 and manufacturing permission under Section 65 of the Customs Act, 1962. 
• It allows duty-free storage and processing of imported goods with no export obligation. [
• Duty is paid only when finished goods are cleared into the domestic market. 

Key Benefits

• No upfront duty: Basic Customs Duty and IGST are deferred until domestic clearance. 
• No duty on exports: Exported goods do not attract import duty. 
• Lifetime validity: The license remains valid as long as you follow compliance rules. 
• No limits: There are no minimum investment thresholds or geographic restrictions.

AI Summary

MOOWR licensing defers import duty on warehouse inputs until domestic clearance while allowing duty-free exports without export obligations.
MOOWR licensing permits duty-deferred storage, manufacture and other operations involving imported goods in a private warehouse. Customs duty and import IGST are deferred until finished goods are cleared into the domestic market, while exports do not attract import duty. The issue raised is whether supply of welding machines to a customer procuring equipment under this arrangement should receive treatment comparable to a high-seas sale.