MOOWR, 2019 (Manufacturing and Other Operations Under Warehouse Regulations, 2019)
Introduction
CBIC launched the MOOWR scheme to defer the Customs duties on imported goods that are used for the intended purposes of manufacture or carrying out other activities.
The scheme is aimed at transforming India into a competitive manufacturing location and an attractive investment destination.
Features of MOOWR
Any business desiring to conduct manufacture or any other operations can apply under the scheme.
The scheme does not have minimum investment requirement or restriction on its location.
The scheme gives flexibility in sourcing capital goods as well as inputs. The capital goods and inputs can be sourced through imports, domestic market or even from SEZ/ FTWZ (Free Trade Warehousing Zones).
There are no other conditions/ obligations such as export obligation, minimum employment generation, minimum investment in plant and machinery, etc.
Incentive under the MOOWR Scheme
Duty-deferment in case of import of capital goods and inputs stands deferred till their clearance from warehouse.
In case of clearance of capital goods to DTA, deferred duties will become payable. In case of clearance of finished goods into DTA, GST on finished goods along with import duties on imported inputs are payable. (GST paid will be available as credit)..
Deferment of customs duty on capital goods will actually result in savings of the duties as Capital goods are not removed from the unit for years.
Whereas, deferment of customs duty on raw material will result in freeing up the working
Capital and savings in interest cost.
Further, customs duty is not required to be paid on the imported raw materials if the manufactured goods are directly exported from the manufacturing unit.
Other relaxations under the MOOWR Scheme
Eligibility
Any manufacturer importing raw materials and capital goods can avail the benefit under the
MOOWR Scheme.
Additionally, an existing manufacturing unit can also avail the benefits under the MOOWR
Scheme.
Even, a job worker doing job work (process which amounts to manufacture) for other manufacturers can also import capital goods under this Scheme without payment of customs duties.
How it works
Under the MOOWR Scheme, the manufacturing facility is converted into a Private Customs Bonded
Warehouse.
Imported goods (raw material as well as capital goods) can be deposited in the Private Customs Bonded Warehouse i.e., MOOWR unit, by way of filing a bill of entry for warehousing, without payment of any Customs duty + IGST.
Further, manufacturing or other operations can be carried out on such goods in the MOOWR unit and manufactured goods can be removed from the MOOWR unit for local sales or export.
When the manufactured goods are cleared for local sales, proportionate import duty is required to be paid only on the imported raw materials consumed in the production of such goods.
If manufactured goods are exported, in addition to the waiver of BCD + IGST on the imported goods used, the GST on the finished goods can also be zero-rated.