Overview
This benefit comes with an important compliance requirement in the form of filing of monthly returns. Since Customs does not monitor the day-to-day operations within a MOOWR warehouse, the monthly returns provide the department with visibility on the goods received, consumed and cleared, as well as the associated duty liability.
The monthly return must be submitted to the jurisdictional bond officer within 10 days from the end of each month. It is prepared based on the records that the warehouse operator is required to maintain and should be submitted as per the format prescribed in Annexure B to Circular No. 34/2019-Customs dated 01-10-2019.
The monthly return is required to be filed for every month as long as the MOOWR licence is active, including the months, if any, in which there is no manufacturing or its related activities.
Key facts
- Who files: every MOOWR licensee operating under Section 65 read with Section 58 of the Customs Act, 1962.
- To whom: the jurisdictional bond officer.
- Due date: within 10 days from the end of each month.
- Format: as per the stipulated format (Annexure B of Circular No. 34/2019-Customs dated 01-10-2019) having details for receipts, processing and removals.
- Applicable notifications: Manufacture and Other Operations in Warehouse (No. 2) Regulations, 2019, notified by Notification No. 69/2019-Customs (N.T.) dated 01-10-2019, and Circular No. 34/2019-Customs of the same date.
- Retention period of records: five years from the date of removal of the goods from the warehouse.
- Record-based Customs monitoring: there is no day-to-day physical monitoring by Customs officials. It is based on the records/accounts maintained and the monthly returns submitted.
- Who has to file the monthly returns: anyone holding a MOOWR licence under Section 65 of the Customs Act, 1962 has to mandatorily file the monthly returns. The obligation to file monthly returns starts from the day the MOOWR licence is granted, not from the day the MOOWR operations start.
What does correct filing of monthly returns protect?
The filing of monthly returns is a mandatory compliance requirement. Its purpose is to give Customs a month-by-month reconciliation of all the bonded goods and their movement, so that Customs can establish that duty-deferred goods are properly accounted for. It signifies the following:
Opening stock
Bonded inventory carried forward from the previous month.
Imports / receipts
Goods received against Bills of Entry/Invoice, including quantity, value, description and other identification details.
Physical quantity
Quantity/weight of each bonded material actually received and available.
Storage
Goods physically available within the bonded warehouse.
Manufacturing/operations
Operations carried out on the warehoused goods under Section 65 of the Customs Act, 1962.
Inputs consumed
Inputs consumed in the manufacturing process and the corresponding reduction in the bonded inventory.
Input-output relationship
Whether the consumption of inputs is consistent with the declared/approved input-output norms.
Losses / wastage
Shortages, damage, wastage, etc., wherever applicable.
Finished goods
Production and accounting of goods resulting from the manufacturing/other operations.
Removals
Accounts for every removal from the warehouse and its purpose.
DTA clearances
Goods cleared for home consumption and the corresponding ex-bond Bill of Entry/duty liability.
Exports
Goods removed for export and the relevant shipping bill/export documentation.
Duty position
For the goods cleared into DTA, Customs can reconcile the quantity/value with the applicable deferred customs duty.
Closing stock
Ensures whether Opening Stock + Receipts − Consumption/Removals = Closing Stock.
Bond accountability
Whether goods covered by the warehousing bond remain properly accounted for.
Documentation trail
Whether each movement can be traced to the relevant Bill of Entry, Shipping Bill, transfer document, etc.
Audit trail
Provides Customs with the basis for subsequent verification/audit of the warehouse records.
Destruction/relinquishment
Accounts for the goods destroyed, relinquished or otherwise disposed of under permitted procedures.
Warehouse-to-warehouse transfers
Account of goods transferred to another bonded warehouse as permitted.
Bond-to-bond receipts
Goods received from another warehouse and their corresponding documentation.
Documents required
The monthly returns are compiled from the records that are expected to be maintained in a MOOWR premises, such as:
Records maintained at the MOOWR premises
- Warehousing bills of entry and ex-bond bills of entry
- GST invoices and e-way bills for domestic receipts and clearances
- Shipping bills and export GST invoices
- Delivery challans for job-work movements
- The form for transfer of goods for warehouse-to-warehouse movement
- Production and issue records against your declared input-output norms
- Wastage and scrap records
- The bond register showing debits and credits against Section 59 of the Customs Act, 1962
How it works
The steps below cover the recurring monthly filing process.
Keep the records and accounts updated
The accounts are meant to be maintained in digital form as and when the transactions happen, but not reconstructed just before the submission of the monthly reports.
Reconcile receipts
Match every warehousing bill of entry and domestic purchases to the goods physically received, and check the one-time lock and quantity on arrival.
Reconcile consumption to output
Ensure adherence to the declared input-output norms. In case the norms are changed, you are required to inform the department accordingly.
Account for every removal
Exports against shipping bills, domestic clearances against ex-bond bills of entry with duty payment, inter-warehouse transfers against the prescribed form.
Wastage and scrap
Record it as destroyed or as cleared on payment of duty, and keep the challan.
Update the bond position
Debit and credit the Section 59 bond schedule so that the running balance is current.
File the monthly returns within ten days from the end of the month
File a nil return for a month with no activity.
Applicable scheme
This monthly return obligation arises directly out of holding a MOOWR licence under Section 65 read with Section 58 of the Customs Act, 1962. If you have not yet obtained the licence, or want the full picture of eligibility, benefits and the application process, see the parent scheme page.
MOOWR Scheme (Section 65)
Duty deferment on inputs and capital goods used in licensed private-bonded-warehouse manufacturing. Monthly returns are the ongoing compliance requirement that keeps a MOOWR licence in good standing.
See MOOWR Scheme Services →FAQs
Within ten days from the end of the month to which it relates.
Yes. As per Annexure B to Circular No. 34/2019-Customs, which includes the fields for receipts, processing, removals and wastage.
Yes. The obligation to file monthly returns starts from the date of the grant of the licence, so a nil return is required to be filed for months with no transactions/operations.
At present there is no online filing facility for the MOOWR monthly returns, hence the monthly returns are filed manually by submitting the details to the jurisdictional customs office.
Five years from the date of removal of the goods. Digital copies must also be preserved at a place other than the MOOWR warehouse as a backup.
There is no separate late-filing fee prescribed in the regulations. However, statutory compliances are required to be ensured.
The jurisdictional customs officer to whom the monthly reports are submitted is the authority concerned.
Yes. Domestic receipts are accounted for in the monthly reports.
The job-work activity should meet the requirements as per GST norms, which includes detailed compliance procedures.
Beyond the monthly returns, licensees carry the continuing obligations to have the records and accounts updated. This includes yearly renewals of the all-risk insurance policy, the solvency certificate, the triple duty bond and the fire audit.
