Benefits of the MOOWR Scheme for Importers

Benefits of MOOWR scheme begin with a single mechanism: customs duty on imported goods is not paid at the port. It is deferred until the goods leave the bonded warehouse for the domestic market, and remitted entirely if they are exported. For an import dependent business, that converts a fixed outflow at clearance into working capital that stays in the business until a sale actually happens.

The benefits of MOOWR scheme are real and substantial. They are also not free, and the honest version of this page has to say what they cost. Most published guidance stops at the upside.

Benefits of MOOWR Scheme: The Seven That Matter

1. Duty deferment with no interest

Basic Customs Duty and IGST stand deferred on import of both inputs and capital goods. No interest accrues on the deferred amount. This is unusual. Most deferment mechanisms charge for the privilege, and MOOWR does not.

2. Full remission on exports

If the resultant goods are exported, the deferred duty on the imported inputs contained in them is remitted. Nothing is payable. Capital goods may likewise be exported after use, without duty, under Section 69 of the Customs Act, 1962.

3. No export obligation

There is no export target, no minimum export performance, no net foreign exchange requirement and no monitoring period. A unit may sell one hundred percent of its output domestically without breaching any condition. EPCG, by contrast, demands exports of six times the duties saved over six years.

4. No warehousing time limit

Goods may remain bonded indefinitely. An importer with seasonal or lumpy demand is not penalised for holding stock, and is not forced into a clearance decision before the market is ready.

5. Flexible eligibility

No minimum turnover, no minimum investment threshold, no employment condition and no locational restriction. An existing factory in the Domestic Tariff Area can be converted. CBIC itself describes the scheme as MSME friendly. Our note on whether MSMEs can apply for MOOWR covers the one practical constraint, which is the solvency certificate.

6. Perpetual licence

The licence under Section 58 and the permission under Section 65 remain valid until cancelled or surrendered. There is no renewal cycle and no expiry date to track.

7. A dual purpose warehouse

This is the benefit almost nobody explains. Because a Section 65 warehouse also functions as a warehouse licensed under Section 58, the licensee may import goods and clear them as such, without any manufacture, either for export under Section 69 or for home consumption under Section 68. The same infrastructure serves both the bonded manufacturing operation and straightforward warehousing.

One trap here. Goods cleared as such for home consumption attract interest under Section 61(2). Resultant goods emerging from manufacture do not. The distinction is easy to miss and expensive to discover late. Where the warehouse is used for non Section 65 purposes, monthly returns in Form B under Circular No. 25/2016-Customs are also required.

What the Benefits of MOOWR Scheme Cost You

Three costs. Each is decisive for some importers and irrelevant to others.

• No RoDTEP, no duty drawback. Products manufactured wholly or partly in a Section 65 warehouse are ineligible for RoDTEP, and drawback is likewise barred. Unlike SEZ and EOU, there is no provision contemplating future inclusion. The bar is premises based, so goods produced at a separate non MOOWR factory may still qualify.
• No depreciation on capital goods. If machinery is later cleared into the domestic market, duty is computed on the original CIF value declared at import, however many years it was used. IGCR, by contrast, permits depreciation. See our note on raw materials and capital goods.
• Duty on waste and refuse. Where waste arising from manufacture is cleared into the domestic market, duty is payable on the quantity of warehoused goods contained in it. If the waste is destroyed, no duty arises. A high scrap process should model this.

An exporter currently earning All Industry Rate drawback should price that income against the deferment before applying. For a heavily export oriented unit the benefits of MOOWR scheme can be worth less than what is surrendered.

Compliance the Benefits Are Attached To

MOOWR is often described as light touch. It is lighter than EOU or SEZ. It is not nil.

• Monthly returns to the jurisdictional Bond Officer by the tenth of the following month. These are monthly, not quarterly.
• A single digital account recording receipt, consumption, waste and removal.
• A triple duty bond backed by a solvency certificate, which caps the duty deferrable at any one time.
• A nominated and approved warehouse keeper.
• Controlled access, boundary walls, gates and CCTV. A fully enclosed structure is not mandatory, but the site must be suitable for secure storage of dutiable goods.
• Risk based audit. There is no day to day physical control of the unit.

Filings run through ICEGATE. Export documentation continues under the Directorate General of Foreign Trade framework.

Two 2026 Changes Importers Should Know

Applications are no longer submitted online. The Invest India MOOWR portal stopped accepting them in late 2025. A licence under Section 58 and permission under Section 65 must now be sought directly from the jurisdictional Principal Commissioner or Commissioner of Customs, in the prescribed physical format.

Separately, Budget 2024 inserted a proviso to Section 65(1) empowering the Central Government to notify classes of goods or operations not permitted in a MOOWR unit. Section 65A, inserted by the Finance Act, 2023, would require IGST and compensation cess on deposit rather than on clearance, though its effective date has not been notified. Any cash flow model resting on deferred IGST should treat that line as contingent.

Frequently Asked Questions

Q1. What are the main benefits of MOOWR scheme for importers?

The principal benefits of MOOWR scheme are interest free duty deferment on inputs and capital goods, full remission of duty on exports, no export obligation, no warehousing time limit, no minimum investment or turnover threshold, and a perpetual licence requiring no renewal.

Q2. Is interest charged on deferred duty under MOOWR?

Not on resultant goods emerging from manufacture. However, imported goods cleared as such for home consumption, without any manufacture, attract interest under Section 61(2) of the Customs Act, 1962.

Q3. Can I claim RoDTEP or duty drawback under MOOWR?

No. Products manufactured wholly or partly in a Section 65 warehouse are ineligible for RoDTEP, and duty drawback is unavailable. This is the principal cost of the scheme’s flexibility.

Q4. Is duty payable on waste generated in a MOOWR unit?

Yes, where the waste or refuse is cleared into the domestic market. Duty is payable on the quantity of warehoused goods contained in it. If the waste is destroyed, no duty is required to be paid.

Q5. Can I still apply for MOOWR online?

No. The Invest India MOOWR portal stopped accepting applications in late 2025. Applications now go directly to the jurisdictional Principal Commissioner or Commissioner of Customs in the prescribed physical format.

Related guides

• Start here: What is the MOOWR Scheme in Customs?
• Is the MOOWR Scheme Shutting Down or Facing Changes? (2026)
• Disadvantages of the MOOWR Scheme: The Real Costs (2026)
• Legal Approvals Required for the MOOWR Scheme (2026)
• Is MOOWR Good for Electronics and Auto Component Importers? (2026)

Would you rather not handle this yourself? We offer MOOWR scheme application support.