1. Introduction to MOOWR Scheme

The Manufacture and Other Operations in Warehouse Regulations, 2019 (MOOWR) is a transformative initiative introduced by the Government of India under Section 65 of the Customs Act, 1962. The scheme enables businesses to undertake manufacturing and other operations in a bonded warehouse without upfront payment of customs duty.

The scheme was reintroduced in 2019 to replace the earlier warehousing framework and align India’s manufacturing ecosystem with global competitiveness, WTO norms, and ease of doing business objectives.

It is designed as a duty deferment mechanism (not exemption), allowing import duties to be deferred until goods are cleared for domestic consumption.

2. Key Objectives of MOOWR

• • Promote India as a global manufacturing hub
  • Provide working capital efficiency through duty deferment
  • Simplify compliance and approval processes
  • Remove export-linked conditions (WTO compliant)
  • Enhance operational flexibility for businesses

3. Eligibility and Applicability

Eligibility for application for operating under these regulations. –

(1) The following persons shall be eligible to apply for operating under these regulations, –

(i) a person who has been granted a licence for a warehouse under section 58 of the Act, in accordance with Private Warehouse Licensing Regulations, 2016.

(ii) a person who applies for a licence for a warehouse under section 58 of the Act, along with permission for undertaking manufacturing or other operations in the warehouse under section 65 of the Act.

An application for operating under these regulations shall be made to the Principal Commissioner of Customs or the Commissioner of Customs, as the case may be, along with an undertaking to, –

• • maintain accounts of receipt and removal of goods in digital form in such format as may be specified and furnish the same to the bond officer on monthly basis digitally;
  • execute a bond in such format as may be specified; and
  • inform the input-output norms, wherever considered necessary for raw materials and the final products and to inform the revised input-output norms in case of change therein

4. MOOWR License – Legal Requirement

To operate under the scheme, an entity must obtain a license under Section 65 of the Customs Act, 1962.

Approval Process

• • Application submitted to Jurisdictional Commissioner of Customs
  • Single unified application-cum-approval form
  • Key steps:
    • Submission of application with project details
    • Antecedent verification
    • One-time site inspection
    • Execution of bond with security/insurance

Once approved:

• • • License has perpetual validity (no renewal required)
    • Remains valid until surrendered or cancelled

5. Key Features of the MOOWR Scheme.

a. Duty Benefits

• • No upfront customs duty on:
    • Imported raw materials: Duty on Import of Raw Material used in Manufacturing or other operations is deferred Until their clearance of Finished Goods. Deferred duties will be waived in case Finished goods is exported
    • Imported capital goods: Duty of Capital goods used in Manufacturing or other operations is deferred Until their clearance from the bonded facility. Capital Goods can be Exported and duties can be avoided
    • Seamless Warehouse to Warehouse Transfer: Transfer of goods from Bonded Facility to another bonded facility without payment of Duty
  • Duty payable only at time of:
    • Clearance to Domestic Tariff Area (DTA)

b. Export Benefits

• • No duty on inputs if final goods are exported
  • Zero-rating of domestic procurements

c. Storage Benefits

• • No time limit for storage of goods (except trading cases)

d. Flexibility

• • No export obligation: No Limit on the share of Clearance of goods for the Domestic Market. An Entity may manufacture in Bonded Warehouse and sale 100% in Domestic Market.
  • Goods can be:
    • Exported
    • Sold domestically
  • Inputs can be sourced from:
    • Imports
    • Domestic market
    • SEZ / FTWZ

e. Operational Advantages

• • No physical control by customs authorities
  • Record-based compliance system
  • Digital account keeping
  • Job work permitted

6. Core Compliance Requirements under MOOWR

Though the scheme simplifies compliance, certain critical obligations must be adhered to:

a. Bond Execution

• • Execute bond with customs authorities covering duty liability

b. Maintenance of Digital Records

• • Maintain detailed records of:
    • Receipt of goods
    • Processing/manufacturing
    • Removal of goods
  • Digital account keeping is mandatory
  • Appoint Warehouse Keeper with digital signature

c. Warehouse Control & Security

• • Ensure:
    • Secure premises
    • Proper storage infrastructure
    • Controlled access

d. Monthly Returns

• • Submit prescribed returns to customs authorities: Recipient of license to manufacturing or other operations in the warehouse under sec 65 of the Act is required to comply with the provisions of Manufacture and Other Operations in Warehouse (no. 2) Regulations, 2019 and file monthly return to bond officer in form A by 10^th of the next month.  

e. Duty Payment Compliance

• • Duty payable:
    • On imported inputs when goods cleared to DTA
    • On capital goods when cleared domestically

f. Facilities, equipment and personnel.

Ensure bonded warehouse displays required signage, maintains computerized inventory system, and has adequate facilities, equipment, and personnel for access control, secure storage, and compliance with customs regulations under MOOWR.

g. GST Compliance

• • GST applicable on:
    • Domestic clearance of finished goods
  • Input tax credit available

h. Audit & Inspection Readiness

• • Maintain records for verification
  • Subject to audit by customs authorities

i. Job Work Compliance

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  • Inputs can be sent for job work under prescribed conditions

7. Clearance Mechanism under MOOWR

a. Transfer of goods from a warehouse: A licensee shall allow transfer of warehoused goods to another warehouse or to a customs station for export, with due intimation to the bond officer on the Form for transfer of goods from a warehouse.

b. A licensee may remove the resultant goods from warehouse for home consumption: Provided that a bill of entry for home consumption has been filed in respect of the warehoused goods contained in so much of the resultant goods and the import duty, interest, fine and penalties payable, if any, in respect of such goods have been paid.

c. Removal of resultant goods for export: A licensee shall remove the resultant goods from the warehouse for export without payment of duties or under IGST refund, upon filing a shipping bill or a bill of export, as the case may be.

Note: The licensee shall ensure goods transported from customs station to warehouse, between warehouses, or for export are carried in vehicles with load compartments securely sealed using a one-time-lock to prevent tampering and ensure customs compliance.

8. Penal Provisions

Under the provisions of the Customs Act, 1962 and the Private Warehouse Licensing Regulations, 2016, there is no specific standalone penalty section prescribed exclusively for private warehouse licensing; however, non-compliance with the conditions of the license, improper storage, non-maintenance of records, or breach of regulatory requirements may lead to suspension or cancellation of the warehouse license by the Commissioner of Customs.