Customs Act, 1962 · Section 65
MOOWR Scheme: defer customs duty on machinery and inputs
Under MOOWR — the Manufacture and Other Operations in Warehouse Regulations, 2019 — your own factory runs as a customs bonded warehouse. Imported machinery and raw materials come in without paying customs duty or IGST. Duty on imported inputs is paid only when finished goods are sold in India, never on what you export — with no interest, no export obligation, and a permission that stays valid until you surrender it.
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What is the MOOWR scheme?
MOOWR lets a manufacturer run its factory as a customs bonded warehouse under Section 65 of the Customs Act, 1962. Imported capital goods and inputs are cleared into the factory without paying duty; duty on imported content is paid only when goods are sold in India, and not at all on exports. There is no interest and no export obligation.
- Legal basis
- Section 65 of the Customs Act, 1962, with a private warehouse licence under Section 58; the Manufacture and Other Operations in Warehouse (No. 2) Regulations, 2019 (Notification 69/2019-Customs (N.T.), 1 October 2019); procedure in Circular 34/2019-Customs.
- Who can use it
- Any unit that manufactures or carries out other operations — assembly, testing, repair, re-conditioning, packing — at its own premises, anywhere in India. No zone, no export requirement.
- Duty deferred
- Basic customs duty, the social welfare surcharge, IGST, compensation cess and other customs duties on imported goods, for as long as they stay in bond.
- On exports
- No duty on the imported content of goods you export (Section 69).
- On sales in India
- Duty on the imported content is paid when the goods are cleared, on an ex-bond bill of entry; GST applies to the sale as usual.
- Interest and time limit
- No interest on the deferred duty and no time limit on how long goods stay in bond.
- Validity and bond
- The permission stays valid until surrendered or cancelled. The unit executes a triple-duty bond with Customs.
Where it pays in Gujarat. Import-heavy manufacturers near the western ports use MOOWR for machinery and recurring inputs — whether they export or sell in India.
- Mundra, Kandla — port hinterland
- Sanand, Becharaji — auto components
- Dahej, Ankleshwar — chemicals
- Vapi — pharma, chemicals
- Hazira — steel, engineering
- Rajkot — machine tools, engineering
- Morbi — imported kilns and presses
How MOOWR works: import, operate, clear
Goods move from the port to your bonded factory under a one-time lock and stay under bond while you work on them. What you export leaves without duty; what you sell in India pays the deferred duty on its imported content at clearance.
Capital goods
Machinery imported into the bonded premises does not pay duty while it is used there. Duty becomes payable only if the machinery is cleared out of bond for home consumption — so the saving is in cash that is not tied up in duty for as long as the machinery stays under bond.
Raw materials and components
Imported inputs are consumed in production against declared input-output norms. At each clearance, the unit pays duty only on the imported content of the goods going to the domestic market. Goods bought in India are brought in on payment of GST, with input tax credit as normal.
Waste and scrap
Waste generated from imported inputs can be cleared for home consumption on payment of the applicable customs duty and GST.
Invest India’s online MOOWR facility was extended only until 15 November 2025 (Circular 27/2025-Customs). Applications now go to the jurisdictional Principal Commissioner or Commissioner of Customs, with CBIC moving them to its own digital module — in Gujarat, typically the Ahmedabad, Kandla or Mundra commissionerate.
MOOWR scheme benefits: what you save and what you defer
MOOWR removes duty on exported content outright and moves the rest of the duty from the day of import to the day of sale. The IGST part would normally come back as input tax credit, so it is mostly a cash-flow gain; basic customs duty on exported content is a real saving.
Exported content
Duty on imported inputs that leave the country in your products is never paid.
Domestic sales
Duty on imported content is paid only when the goods are cleared — weeks or months after import, without interest.
Machinery
Duty on capital goods stays deferred while they are used under bond — often for years.
Honest maths: without MOOWR, IGST paid at import is usually available as input tax credit, and exporters recover part of their input duty through drawback or RoDTEP. The real gain is basic customs duty on exported content plus the financing cost of duty you no longer pay upfront — which is what the calculator below measures.
MOOWR benefit calculator
Enter your imported machinery and, if you like, a year of imported inputs. The calculator works out the duty not paid at the port, the financing cost it saves, and how much duty on inputs is never payable because it leaves in exports.
Imported machinery
Leave any rate blank to use the default shown in grey.
Imported raw materials (optional)
Duty not paid at import
—
Enter the machinery you will import, your yearly imported inputs, or both.
- Duty deferred on machinery—
- Financing cost avoided on it—
- Duty on imported inputs a year—
- Never payable — exported share—
- Paid when sold in India—
- EPCG alternative for the machinery—
- Export obligation under MOOWR—
Indicative only. Duty = basic customs duty + 10% surcharge on it + IGST on the value including both. Actual rates depend on each tariff line, exemptions and any anti-dumping duty.
Get this estimate checkedWhat MOOWR is worth: two examples
Round numbers at 7.5% basic customs duty, the 10% surcharge and 18% IGST — an effective 27.7% on the assessable value.
Auto-component plant, Sanand
Imports ₹20 crore of machining centres and presses into its bonded factory.
- Duty and IGST at the port, normally₹5.55 crore
- Paid at the port under MOOWR₹0
- Financing cost avoided at 10%₹55.47 lakh a year
- Cash kept in the business₹5.55 crore
The duty stays deferred while the machines are used under bond; it is paid only if they are ever cleared for home consumption.
Chemical unit, Dahej
Imports ₹30 crore of intermediates a year and exports 40% of its output.
- Duty and IGST on a year of inputs₹8.32 crore
- Exported share — never paid₹3.33 crore
- Domestic share — paid at clearance₹4.99 crore
- Not payable each year₹3.33 crore
No export obligation: if exports fall, the unit simply pays duty on what it sells in India.
Is MOOWR right for your unit?
MOOWR suits manufacturers who import regularly or are importing large machinery, whether they export or not. It adds customs-grade record keeping, so very small or occasional importers may find the compliance outweighs the benefit.
Good fit
- Greenfield or brownfield projects importing machinery
- Units importing raw materials or components every month
- A mix of exports and domestic sales
- Units whose export share changes from year to year
- Units that want duty-free imports without an export obligation
Think twice
- Pure trading — goods must undergo manufacturing or other operations
- Very small or one-off imports
- Units unable to keep digital, reconcilable stock records
- Products under specific CBIC restrictions — checked before filing
MOOWR vs EPCG vs Advance Authorisation
MOOWR defers duty with no export obligation. EPCG waives duty on capital goods against an export obligation. Advance Authorisation waives duty on inputs used in exports.
Swipe sideways to see every column
| MOOWR | EPCG | Advance Authorisation | |
|---|---|---|---|
| What you get | Duty deferred on imports; nil on exported content | Duty waived on capital goods | Duty waived on inputs for export production |
| Goods covered | Capital goods and inputs | Capital goods | Inputs |
| Export obligation | None | 6× duty saved in 6 years | Against each authorisation |
| Domestic sales | Allowed — duty on imported content at clearance | Allowed, over and above the obligation | Duty-free inputs are meant for exports |
| Administered by | Customs (CBIC) | DGFT | DGFT |
| Best for | Regular importers, domestic or export | Established exporters buying machinery | Exporters importing raw materials |
Not sure which route is cheaper for your capex? The EPCG page has its own calculator, and our MOOWR vs EPCG guide walks through the choice.
How to get a MOOWR licence
One combined application covers the Section 58 licence and the Section 65 permission. Once Customs verifies the premises and you execute the bond, the permission is granted and runs until you surrender it.
Get the premises ready
A bonded unit needs clear signage, a computerised system that records receipt, storage, operations and removal of goods, and enough control over access to keep goods in bond secure.
Before filingFile one combined application
Apply to the jurisdictional Principal Commissioner or Commissioner of Customs for a private warehouse licence under Section 58 and permission for manufacturing under Section 65 — both in one form — with an undertaking to keep digital accounts and declare input-output norms.
Verification
Customs verifies the application and premises. Answers should match the site plan, the process description and the input-output norms you filed.
Execute the bond
Sign the triple-duty bond that covers both the regulations and Section 59, and appoint a warehouse keeper with warehousing and customs experience and a digital signature.
Permission granted
The licence and permission are issued; they stay valid until surrendered or cancelled.
No renewalImport into bond
File warehousing bills of entry at the port or ICD and move goods to the factory under a one-time lock; acknowledge arrival to Customs.
Arrival within 1 month
Compliance: records, returns and clearances
- Digital records
- Keep detailed, reconcilable records of receipt, handling, operations and removal of goods, in the format CBIC has specified — and a digital copy away from the warehouse.
- Monthly return
- File a monthly return of receipts, storage, operations and removals with the bond officer within 10 days after the end of the month — nil months included.
- Retention
- Preserve records for at least five years from the removal of the goods.
- Movements
- Goods move between port, warehouse and export station under a one-time lock; arrival is acknowledged within a month.
- Clearances
- Home consumption on an ex-bond bill of entry with duty paid; exports on a shipping bill.
- Audit and penalties
- Customs may audit the unit; breaches of the regulations attract penalties under the Customs Act.
Section 65A, added by the Finance Act, 2023, allows IGST and compensation cess to be collected when goods are brought in for Section 65 operations. It applies only from the date the government notifies — we confirm the current position for your tariff lines before you file.
Documents for a MOOWR application
Typical documents — Customs may ask for more.
- Importer-Exporter Code, GST and PANof the applicant entity
- Constitution documentsincorporation certificate, partnership deed or LLP agreement
- Proof of possession of the premisesownership or lease covering the licence period
- Site plan and layoutshowing the bonded area and storage
- Process description and input-output normsfor each final product
- List of goods to be importedmachinery and inputs, with tariff classification
- Records system detailssoftware used for digital accounts
- Warehouse keeper detailsexperience and digital signature
- Triple-duty bondin the format CBIC specifies
- Board resolution or authority letterfor the authorised signatory
Where MOOWR units go wrong
- Treating it as duty-free.Duty on domestic sales is deferred, not waived.
- Loose input-output norms.Duty at clearance is computed on them — unrealistic norms cause disputes.
- Records that don’t reconcile.The monthly return must tie back to bills of entry and clearances.
- Missing the monthly return.Due within 10 days of month end — nil months too.
- Moving goods without a one-time lock.Every transfer is documented and sealed.
- Counting on RoDTEP or drawback.Goods made partly or wholly in a Section 65 warehouse are excluded from both — price that in.
- Ignoring the EPCG comparison.Established exporters may do better with an outright waiver.
MOOWR scheme: questions we get asked
What is the MOOWR scheme?
MOOWR — the Manufacture and Other Operations in Warehouse Regulations, 2019 — lets a unit manufacture inside its own customs bonded warehouse under Section 65 of the Customs Act, 1962. Imported capital goods and inputs enter without paying customs duty or IGST; duty on imported content is paid when goods are sold in India, and not at all when they are exported. There is no interest and no export obligation.
Is MOOWR the same as an EOU or SEZ?
No. MOOWR works at your existing factory, anywhere in India, with a Section 58 warehouse licence and Section 65 permission. There is no zone, no export obligation and no requirement to earn foreign exchange.
Which duties are deferred under MOOWR?
Basic customs duty, the social welfare surcharge, IGST, compensation cess and other customs duties such as anti-dumping duty on imported goods, for as long as the goods stay in bond.
Is interest payable on duty deferred under MOOWR?
No. Duty deferred on goods used for manufacturing or other operations under Section 65 does not attract interest, and there is no time limit on how long the goods stay in bond.
Is there an export obligation under MOOWR?
No. A MOOWR unit can sell its entire output in India; it simply pays duty on the imported content of whatever it clears for the domestic market.
What happens to duty on imported machinery under MOOWR?
It stays deferred while the machinery is used in the bonded premises. Duty becomes payable only if the machinery is cleared out of bond for home consumption.
How do we apply for a MOOWR licence now?
File one combined application for a private warehouse licence under Section 58 and manufacturing permission under Section 65 with the jurisdictional Principal Commissioner or Commissioner of Customs. Invest India’s online facility was extended only until 15 November 2025; CBIC is moving applications to its own digital module. The permission stays valid until surrendered or cancelled.
What are the ongoing compliances for a MOOWR unit?
Digital records of receipt, operations and removal of goods; a monthly return to the bond officer within 10 days after the end of each month; records kept for five years; one-time locks on movements; and customs audits.
Can MOOWR be combined with concessional duty under IGCR?
Yes. CBIC Circular 26/2024-Customs of 21 November 2024 confirmed that a MOOWR unit can claim concessional rates under the IGCR Rules alongside duty deferment, if it meets the conditions of both.
Can a MOOWR unit claim RoDTEP or duty drawback on its exports?
Not on goods manufactured partly or wholly in its Section 65 warehouse. Such goods are listed as ineligible for RoDTEP, and the All Industry Rate drawback notification excludes them (Notification 77/2023-Customs (N.T.), condition 9(i)). Exporters with meaningful RoDTEP or drawback rates should weigh that loss against the duty MOOWR saves — EPCG or Advance Authorisation may work out better.
Is the IGST deferral under MOOWR a real saving?
Mostly a cash-flow gain: IGST paid at import is usually available as input tax credit. The real saving is basic customs duty on exported content and the financing cost of duty you no longer pay upfront.
Legal basis and official sources
This page follows the Customs Act, 1962, the MOOWR (No. 2) Regulations, 2019 and CBIC’s circulars on the scheme.
Customs Act, 1962
Private warehouse licence, the triple-duty bond, warehousing period, manufacture in a warehouse and clearance for export.
CBIC websiteMOOWR (No. 2) Regulations, 2019
Eligibility, the undertaking, validity, the warehouse keeper, one-time locks, removals, records and the monthly return.
CBIC websiteCircular 34/2019-Customs
Single application form, triple-duty bond, records format, and duty on exports, domestic clearances and waste.
CBIC websiteAlso relied on. Circular 26/2024-Customs (21 November 2024) on IGCR with MOOWR; Circulars 18/2025, 19/2025 and 27/2025-Customs on the application route after the Invest India facility; Section 65A inserted by the Finance Act, 2023 (effective only on notification). Duty rates in the examples are illustrative — every tariff line differs.
We set up MOOWR units end to end — premises, application, bond and the monthly compliance that keeps the licence safe — and we tell you when EPCG or Advance Authorisation would serve you better.
- Scheme selection with the numbers: MOOWR vs EPCG vs Advance Authorisation
- Application, premises readiness and bond
- Input-output norms and digital records set-up
- Monthly returns and audit support
Importing machinery or inputs this year?
Send us what you import, what you make and where it goes. We model MOOWR against EPCG and Advance Authorisation, then set up the route that saves the most.