Who Should Opt for MOOWR? 5 Business Profiles That Benefit the Most

Introduction

The MOOWR Scheme (Manufacturing and Other Operations in Warehouse Regulations, 2019) has been gaining significant traction among businesses involved in imports, manufacturing, and customs-related operations. It is one of the most versatile and business-friendly schemes under Indian Customs law. This is in line with the Government of India initiate to encourage Make in India using world class technology and quality raw material to produce high quality goods which can compete globally.

Under this scheme, a company can convert one or multiple manufacturing units into MOOWR units, provided manufacturing or other permitted operations are carried out in such units.

Unlike many other duty-saving schemes, MOOWR has no export obligation, no minimum period of operation requirement, and no turnover criteria. The primary eligibility requirement is having a secure premises with basic customs control and security measures.

Key Features and benefits of the MOOWR Scheme

1. Import of raw materials and capital goods without upfront payment of Basic Customs Duty and IGST

2. Duty is payable only at the time of domestic clearance

3. Exports are fully exempt from Customs Duty and IGST- The duties on raw materials which were deferred at the time of imports get waived off if the finished goods are exported.

4. Unlimited warehousing period without interest- This results substantial saving in finance cost.

5. Duty on capital goods is deferred for the entire useful life of the machinery

6. If raw material is sold as such in the domestic market, applicable customs duty is payable at the time of domestic clearance.

7. If finished goods manufactured using imported raw material are sold domestically, duty and IGST are required to be paid proportionately on the imported inputs used.

8. If finished goods are exported, no customs duty or IGST is payable. This is getting repeated

5 Business Profiles That Benefit the Most from MOOWR

1. Capital-Intensive – Companies Having Substantial Imported CAPEX

Companies importing high-value capital goods or machinery derive maximum benefit under MOOWR Scheme, as customs duty on such capital goods is deferred till the useful life of the machinery.

At the time the machinery becomes obsolete (for example, after 8–10 years), the unit has the option to:

• Export the machinery (deferred duties would be fully waived)

• Sell it domestically by paying duty at the original import rate

• Destroy the machinery with customs permission (deferred duties would be fully waived)

• This provides long-term certainty and flexibility, making MOOWR ideal for companies requiring imported capital goods.

2. Export-Oriented Manufacturers

Although MOOWR does not impose any export obligation, it is extremely beneficial for businesses that:

• Import raw materials or components, and

• Export finished goods

In such cases, customs duty and IGST on imported raw materials used in exported goods are completely waived, resulting in substantial cost savings and by allowing the Indian companies to provide competitive pricing to its global buyers.

3. Companies with 100% Domestic Sale

Companies that import raw materials but sell finished goods in the domestic market can also significantly benefit significantly from MOOWR.

Since manufacturing cycles take time, MOOWR allows businesses to:

• Defer duty during production and storage

• Store raw materials and finished goods for an unlimited period without interest

• Pay duty only when goods are actually sold

This results in lower working capital requirement, improved cash flows, and enhanced operational flexibility.

4. Companies Having Multiple Units Across India

MOOWR is particularly beneficial for companies operating multiple manufacturing units across different states.

Under the scheme:

• Inter-unit transfer of goods is allowed without payment of duty

• Goods can be transferred between units of the same company or even related units

• In the case of inter unit transfer - the duty liability gets transferred to the receiving units.

This enables centralised import planning, flexible production, and efficient supply chain management.

5. Companies Outsourcing Manufacturing or Job Work

MOOWR also supports job work and outsourcing models.

Companies that import raw materials but do not have full manufacturing capability can:

• Send imported inputs to job workers without payment of duties.

• Receive processed or finished goods back into the MOOWR unit

• Export or sell the finished goods as per business requirements

This is particularly useful for companies relying on specialised technology, third-party manufacturing, or contract manufacturing arrangements.

Conclusion

If you are engaged in manufacturing activities and fall under any of the above categories, MOOWR can be a powerful tool to defer customs duties, reduce landed cost, and improve cash flow.

Why Choose CCC?

At Commercial Consultancy Counsel (CCC), we are industry experts in:

• MOOWR licence feasibility assessment

• End-to-end MOOWR licence procurement

• Post-licence compliance and customs support

Book a consultation with us to understand how MOOWR can be structured for your business and get your MOOWR licence smoothly and efficiently.