Benefits
Benefits of MOOWR Scheme for Indian Manufacturers
The MOOWR Scheme (Manufacture and Other Operations in Warehouse Regulations, 2019) is one of the most powerful schemes introduced by the Indian government to support manufacturing businesses that rely on imported inputs and capital goods. By allowing manufacturers to defer payment of import duties, the scheme directly improves cash flow, enhances operational flexibility, and simplifies compliance. Below is a detailed overview of the MOOWR Scheme benefits and the advantages of MOOWR Scheme that make it an essential strategy for duty optimization.
1. No Export Obligation
Unlike other schemes that require mandatory exports or foreign exchange earnings, the MOOWR Scheme does not impose any export obligation. Manufacturers can freely supply their finished goods to the domestic market or export at their discretion. This makes the MOOWR Scheme suitable for factories with a variable market focus or those primarily catering to the Indian market.
2. Job Work Permitted Without Duty Payment
The MOOWR Scheme allows duty-free movement of goods for job work to external facilities. This means that raw materials or semi-finished goods can be sent out of the bonded warehouse (factory) to third-party job workers for specialized processing without paying customs duty at the time of dispatch. This benefit is especially useful for companies engaged in high-precision or multi-stage manufacturing that involves subcontracting.
3. Working Capital Relief
One of the most significant MOOWR Scheme benefits is its impact on working capital. Since import duties are not payable upfront, businesses experience a substantial reduction in blocked funds. The duties become payable only when the goods—whether capital goods, inputs, or components—are cleared from the bonded warehouse (factory) for home consumption. This improves liquidity and allows manufacturers to allocate capital to core business operations.
4. No Time Limit on Duty Free Storage or Processing
One of the unique advantages of the MOOWR Scheme is that it imposes no time restrictions on how long imported goods can be stored or processed inside a bonded warehouse (factory). This gives manufacturers complete flexibility to store capital goods, raw materials, and components in their bonded warehouse (factory) for any duration, as per their operational needs, without the pressure of timelines imposed by other schemes like EPCG or Advance Authorization.
MOOWR Scheme - Duty Advantage
Duty Deferment on Capital Goods
Under the MOOWR Scheme, customs duty is deferred on capital goods imported for use in manufacturing and becomes payable only when the capital goods are physically removed from the bonded warehouse (factory). This is highly beneficial for companies investing in heavy machinery, CNC equipment, or automated systems.
Auxiliary Items Duty Deferment
In addition to machinery, auxiliary items such as moulds, dies, jigs, fixtures, and spares can also be imported under the MOOWR Scheme with full duty deferment. These items remain duty-free as long as they stay within the bonded warehouse (factory). The customs duty is paid only when these items are removed from the factory for use outside the licensed premises or for sale.
Raw Material Duty Deferment
Raw materials imported under the MOOWR Scheme attract no customs duty at the time of import. The duty liability is triggered only when the manufactured goods are cleared from the bonded warehouse (factory) for domestic sale. This feature directly improves operational cash flows and reduces the need for external working capital funding.
Comprehensive Duty Coverage
Another major advantage of the MOOWR Scheme is its comprehensive duty coverage over traditional exemptions schemes, which may be limited to certain types of duties. The scheme allows deferment of all types of duties applicable at the time of import, including: Basic Customs Duty (BCD), Integrated Goods and Services Tax (IGST), Surcharge (SWS) and Anti-dumping duties.
MOOWR vs. Traditional Schemes
Existing Schemes: Limitations
1) Export Oriented Unit (EOU), Export Promotion Capital Goods (EPCG), and Advance Authorization (AA) schemes all impose strict export obligations, requiring manufacturers to export a specified portion of production to avail benefits.
2) These traditional schemes involve complex approval processes from multiple authorities like DGFT, SEEPZ, and Customs, creating administrative burden and delays.
MOOWR: Simplified Approach
1) The MOOWR Scheme addresses these limitations by providing greater operational flexibility without export obligations or minimum investment thresholds.
2) It features a simplified single-window registration process with fewer procedural hurdles and ongoing compliance requirements, making it more accessible to a wider range of manufacturers.
The MOOWR Scheme was specifically designed to overcome the limitations of existing schemes, providing a more flexible alternative for manufacturers seeking duty benefits without restrictive conditions.