Overview
The Manufacture and Other Operations in Warehouse Regulations (MOOWR) Scheme operates under Sections 58 and 65 of the Customs Act, 1962, and is governed by the Manufacture and Other Operations in Warehouse (No. 2) Regulations, 2019, read with CBIC Circular No. 34/2019-Customs dated 01-10-2019.
This scheme enables manufacturers to import capital goods (e.g. plant & machinery), raw materials, components, consumables and other eligible inputs into a licensed private bonded warehouse without upfront payment of applicable customs duties. Unlike other duty exemption schemes, MOOWR functions as a customs duty deferment facility — duties are deferred until the imported goods, or the finished products manufactured from them, are cleared for home consumption. If the finished goods are exported from the private bonded warehouse instead, no customs duty is payable on the imported inputs consumed, subject to compliance with the Customs Act, 1962 and the MOOWR Regulations.
The MOOWR scheme is open-ended and does not prescribe any application window or time limit, enabling eligible entities to apply for the licence at any time. Exporters comparing schemes may also want to review our Advance Authorisation Services and EPCG Scheme Services pages, since all three are commonly evaluated side by side — see the comparison further down this page.
By deferring the incidence of customs duties, the scheme significantly improves working-capital efficiency and cash flow by eliminating the need for upfront duty payment at the time of import. It is particularly beneficial for manufacturers with substantial import content in the form of capital goods or inputs, while also benefitting export-oriented manufacturing and enhancing the competitiveness of domestic manufacturing operations.
We at Kireeti Group provide end-to-end MOOWR compliance support, from the initial eligibility check and application filing on the ICEGATE portal through to ongoing monthly returns, digital inventory accounting, and, where relevant, voluntary surrender of the licence.
Key highlights of the MOOWR scheme
- Scheme type: a duty deferment scheme of Customs which permits manufacturing (and other operations) carried out in a licensed private bonded warehouse.
- Administering authority: administered by CBIC, through the jurisdictional Principal Commissioner or Commissioner of Customs.
- Validity: open-ended and does not prescribe any expiry date — valid from the date of issuance until cancelled by Customs or voluntarily surrendered by the licensee.
- At-a-glance benefit: deferment of import duty on inputs and capital goods until the warehoused goods or finished products made from them are cleared for home consumption; no duty on the inputs used if the finished goods are exported.
- Major condition: the licensee must execute specific bonds (see Documents Required below), maintain prescribed books of account, and file monthly returns as long as the licence is active.
Eligibility
A MOOWR licence is open to both new and existing entrepreneurs and is not restricted to export-oriented units or any particular industry. In practice, it suits businesses that:
- Want to carry out permitted manufacturing and other operations in a licensed private bonded warehouse.
- Want to avoid upfront payment of customs duty on their import of raw materials and capital goods.
- Are willing to operate under a licensed warehouse and meet the compliance requirements around bookkeeping, audit and monthly returns.
- Can furnish the required insurance and bonds this scheme requires — note this is an ongoing commitment, not a one-time initial requirement.
The major attraction of the MOOWR scheme is that there is no mandatory export obligation to be fulfilled, unlike Advance Authorisation and EPCG. Deferred duty becomes payable only at the time of clearance of goods for domestic sale, and if finished goods are exported, no customs duty is payable on the inputs used in their manufacture. MOOWR is very useful for businesses whose sales mix includes both domestic and export markets, since there is no minimum export obligation and no penalty for selling domestically.
MOOWR applications are filed online through the ICEGATE portal. The scheme can be adopted by all types of entities irrespective of scale — from large manufacturers establishing dedicated bonded warehouse facilities to small and medium enterprises designating part of an existing manufacturing premises as a licensed warehouse.
Benefits and savings
Under MOOWR, Basic Customs Duty (BCD), Integrated GST (IGST), Social Welfare Surcharge, Compensation Cess, Agriculture Infrastructure and Development Cess (AIDC), and trade remedial duties such as anti-dumping or safeguard duty on imported inputs and capital goods, are generally deferred until ex-bond clearance. Whether that deferred duty is ultimately paid or fully exempted depends entirely on what happens to the goods next — use the toggle below to see the two outcomes.
Same deferred duty, two very different outcomes
When the warehoused goods, or the finished products made from them, are cleared for home consumption, the deferred customs duty on the imported inputs or capital goods used becomes payable at that point. Until clearance, the duty stays deferred — it is not written off.
When the finished goods manufactured from imported inputs are exported, no customs duty becomes payable on the quantity of inputs consumed in them. Similarly, if imported capital goods are re-exported at any point without being cleared for home consumption, no customs duty is payable on them either.
Beyond duty deferment, MOOWR carries a wide set of operational and business-flexibility benefits:
Flexible premises & permitted operations
A licence may be obtained for a newly established facility or for part of an existing manufacturing premises, subject to Customs approval. Besides manufacturing, activities such as processing, assembly, packing, repacking, labelling, testing, repair, refurbishment, blending and kitting may be undertaken, subject to the Commissioner's permission.
Job-work, contract manufacturing & traders
Imported inputs may be sent outside for job work under prescribed procedures and brought back, and a MOOWR unit can also undertake job work for other DTA units. Contract manufacturers are eligible, as are traders undertaking qualifying value-addition — solely trading, without any approved operations, would not qualify.
Light-touch, digital compliance
Customs officers are not stationed at the private bonded warehouse; compliance is based on digital records, self-accounting and risk-based audit, with monthly returns instead of transaction-wise customs supervision. The jurisdictional Principal Commissioner/Commissioner is the single approving authority.
No renewal, and no closure certification
There is no periodic renewal requirement, and MOOWR avoids the additional closure formalities associated with other redemption-based schemes. Compliance instead centres on maintaining proper warehouse records to establish receipt, use and processing of inputs, and the domestic clearance or export of finished goods.
MOOWR can generally operate alongside certain other customs and foreign trade schemes, provided the same imported goods are not simultaneously availing overlapping duty benefits under multiple schemes — see Applicable Schemes below.
A practical example
This is an illustrative example, not an actual client case.
Case profile: a Pune-based auto-components manufacturer
An auto-components manufacturer based in Pune imports precision machinery and certain alloy inputs for the manufacture of finished goods. Approximately 40% of its finished goods are sold domestically and 60% are exported.
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1No upfront duty
Machinery & inputs brought into the MOOWR premises
Under a MOOWR licence, the manufacturer brings the imported machinery and inputs into the licensed warehouse without upfront payment of applicable customs duties at the time of import.
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260% exported
Exported production
The customs duty attributable to the quantity of imported inputs used in manufacturing the exported finished goods is exempted altogether.
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340% sold domestically
Domestically sold production
The applicable customs duty on the quantity of imported inputs used in the finished goods, deferred at the time of import, becomes payable only when those finished goods are cleared from the warehouse for domestic consumption.
Thus, MOOWR provides both duty deferment and a potential duty-saving benefit: deferment at import, exemption on the quantity of inputs used in exported goods, and deferred payment only on the quantity used in domestically sold goods — helping preserve working capital during the manufacturing cycle. Actual timelines, documentation and eligibility depend on your specific facts; please confirm with our team before you rely on any of it.
Documents required
For MOOWR licensing and compliance work you should provide the below documents; these may vary from case to case depending on the applicable services.
Identity & registrations
- A valid IEC (Importer Exporter Code)
- PAN of the applicant entity
- GST registration of the applicant entity
Entity & premises details
- Constitution of the business
- Details of the Directors / partners / proprietor, as applicable
- Registered address of the business
- Site plan and lease/ownership documents
Bonds, insurance & banking
- Bank account details
- An insurance policy covering the warehoused goods
- Triple Duty Bond
- Indemnity Bond
Operations detail
- Manufacturing process flow
- Details of goods proposed to be manufactured, or other operations proposed to be carried out
Authorisation
- Board resolution or authorisation letter for the application
How it works
Our MOOWR engagement runs from an eligibility check through to licence issuance and ongoing compliance, with an exit path when needed.
Application filing / pre-licence issuance
Before the MOOWR licence is issuedEligibility check
A detailed analysis of eligibility for the MOOWR licence, and its comparison with other alternative schemes, is carried out before filing the application.
Warehouse readiness
Ensuring that the proposed MOOWR premises comply with the applicable requirements.
Bond & insurance arrangement
Ensuring that the Triple Duty Bond, Indemnity Bond and insurance policy are available.
Application filing
The MOOWR application is submitted online on the ICEGATE portal, with supporting documents submitted offline to the jurisdictional Principal Commissioner/Commissioner of Customs.
Verification
Customs reviews the submitted documents and physically inspects the proposed warehouse premises to confirm compliance with the requirements.
Licence issuance
The MOOWR licence is issued upon approval by Customs and stays active until it is cancelled or surrendered.
Post-licence issuance process
Once you hold the MOOWR licenceOngoing compliance
Maintaining the prescribed books of account and filing the required returns for as long as the licence stays active.
Digital inventory accounting
Compilation and error-free accounting of inputs and finished goods for the submission of monthly reports.
Facility to exit
There is an option to voluntarily surrender the MOOWR licence if the business no longer wants to continue under the scheme; this requires payment of the deferred customs duty on goods imported and still available in the MOOWR premises.
- Use of customised checklists to obtain the required documentation.
- Error-free scrutiny to ensure compliance with all requirements of the scheme.
- Efficient liaisoning with departmental officials for physical inspection, clarifications and physical submission of required documents.
- Compilation and error-free accounting of inputs and finished goods for the submission of monthly reports.
Applicable schemes
MOOWR is one of three duty-benefit schemes most Indian manufacturers and exporters evaluate together. It can also operate alongside certain other schemes, provided the same imported goods do not simultaneously avail overlapping duty benefits under more than one scheme — whether that is permissible depends on the conditions of the respective schemes. Here is where each one fits:
MOOWR (Section 65)
Duty deferment on both inputs and capital goods used in licensed warehouse manufacturing. No mandatory export obligation; open-ended validity until cancelled or surrendered. Best suited for manufacturers with a mixed domestic/export sales profile who need import-duty deferment without a fixed export target.
Advance Authorisation
Duty-free import of inputs consumed in export production, tied to a mandatory Export Obligation Period. Domestic sales are restricted to deemed exports and third-party exports. Best suited for exporters who can fulfil an export obligation and need duty-free inputs.
See Advance Authorisation Services →EPCG
Duty-free import of capital goods only, against a separate, multi-year export obligation tied to the authorisation. Domestic sales are similarly restricted to deemed exports and third-party exports. Best suited for exporters investing in new machinery who can commit to that export obligation.
See EPCG Scheme Services →Not sure which scheme — or combination of schemes — fits your import and export mix? Our eligibility check compares MOOWR against Advance Authorisation and EPCG for your specific business before you commit to an application. You may also want to review our broader DGFT Services for related export-incentive support.
Comparison of MOOWR vs. Advance Authorisation vs. EPCG
| Description | MOOWR (Section 65) | Advance Authorisation | EPCG |
|---|---|---|---|
| Benefit | Duty deferment on inputs and capital goods used in warehouse manufacturing | Duty-free import of inputs consumed in export production | Duty-free import of capital goods |
| Export obligation | No mandatory export obligation | Mandatory to fulfil the export obligation | Mandatory to fulfil the export obligation |
| Allowed inputs | Both inputs and capital goods, either together or individually | Inputs only | Capital goods only |
| Domestic sales | Permitted for any Domestic Tariff Area (DTA) sale | Restricted to deemed exports and third-party exports | Restricted to deemed exports and third-party exports |
| Licence / authorisation validity | Open-ended, until cancelled or surrendered | Tied to the Export Obligation Period | Tied to the Export Obligation Period |
| Best suited for | Manufacturers with a mixed domestic/export sales profile who require import-duty deferment without a mandatory export target | Exporters who can fulfil the export obligation and require duty-free import of inputs | Exporters investing in new machinery who can commit to a multi-year export obligation |
Scroll left to see all three schemes
FAQs
MOOWR defers payment of customs duty on goods brought into a licensed bonded warehouse under Section 65. The deferral runs for as long as the goods stay in the warehouse or are used to manufacture goods that are exported; duty becomes payable only when the goods, or products made from them, are cleared for domestic sale. MOOWR defers Basic Customs Duty (BCD), Integrated GST (IGST), Social Welfare Surcharge (SWS), Compensation Cess, Agriculture Infrastructure and Development Cess (AIDC), and trade remedial duties like anti-dumping or safeguard duty, until ex-bond clearance.
No. There is no mandatory export obligation under MOOWR, unlike Advance Authorisation or EPCG.
MOOWR can operate simultaneously with certain other customs and foreign trade schemes, provided the same imported goods are not simultaneously availing overlapping duty benefits under multiple schemes. Whether simultaneous operation is permissible is determined by the conditions of the respective schemes.
You have to arrange the following three, as prescribed under the MOOWR Regulations, 2019:
- An insurance policy covering the warehoused goods
- A Triple Duty Bond
- An Indemnity Bond
The duty deferment obtained for the capital goods at the time of their import has to be paid.
No. There is no time limit for the application. Each individual licence, once granted, stays valid until cancelled or surrendered.
Official Customs / CBIC source notifications
- Customs Act, 1962, Sections 58 and 65 — licensing of private bonded warehouses and manufacture/other operations in a bonded warehouse.
- Manufacture and Other Operations in Warehouse (No. 2) Regulations, 2019.
- CBIC Circular No. 34/2019-Customs, dated 01-10-2019.
- CBIC / ICEGATE portal — for current notifications and procedural updates on MOOWR licensing.
