MOOWR job work is how a Section 65 unit lawfully processes goods for other parties. Section 65 of the Customs Act, 1962 permits the owner of warehoused goods to carry out operations on those goods, so a bonded unit cannot simply hold and process a client’s stock as a custodian.
Circular No. 48/2020-Customs opened the correct route. A Section 65 unit, being a GST registrant, may undertake job work for other units, and may send its own inputs out for job work. The conditions are specific and the penalty for breach is severe.
A Section 65 unit can perform job work for others, and must account for it under GST law. This was clarified expressly to enhance capacity utilisation.
Where imported warehoused inputs are consumed during that job work, duty on those goods is paid by filing an ex-bond Bill of Entry when the job-worked goods are returned to the principal. If the goods are exported from the Section 65 premises after job work, no import duty is payable on the warehoused goods used, under Section 69.
For MOOWR job work, the rules on what may leave the bonded facility are strict:
This is the provision that makes MOOWR job work unforgiving. In case of violation of any of the prescribed conditions, CBIC treats the goods as deemed to have been cleared for home consumption on the date they were cleared for job work.
Duty, interest, and penalties are reckoned from that earlier date, not from the date the breach is discovered. The bond executed by the Section 65 unit stays in full force notwithstanding removal of goods for job work.
On completion, goods may be brought back to the Section 65 unit, or exported or cleared to the DTA from the job worker’s premises. Where they are cleared from the job worker’s premises, Regulations 14 and 15 apply and the date of removal from those premises is deemed to be the date of removal from the warehouse.
Scrap, waste, or remnants generated during job work must be returned to the Section 65 unit or cleared from the job worker’s premises on payment of applicable duties. Timelines follow GST provisions, since the unit is a GST registrant.
Resultant goods may move from one Section 65 unit to another. The transfer form has two parts: Part A completed at the dispatch warehouse, Part B by the recipient, each endorsed by the licensee or warehouse keeper.
The receiving licensee verifies the intactness of the one-time lock and reconciles quantities. The triple duty bond of the transferee is debited under Section 59 and that of the supplier re-credited. A transit risk insurance policy covering the customs duty involved must be in place.
A Section 65 unit may source capital goods or inputs from an SEZ or FTWZ. There is no restriction on sourcing, and the unit is a GST registrant permitted to procure from those zones.
Supply of warehoused goods to any person before clearance for home consumption is covered by Schedule III of the CGST Act, so such movements are not liable to GST.
A logistics provider hoping to hold multiple clients’ bonded stock should note the distinction. MOOWR job work is a processing arrangement in which the Section 65 unit performs operations and accounts for them. It is not the same as warehousing third-party goods under bond.
Multi-client bonded storage is the function of a public warehouse licensed under Section 57, where manufacture under Section 65 is not available. Read our guide on whether a 3PL warehouse can become a MOOWR unit for the ownership and bond structures.
At JPARKS INDIA, we structure MOOWR job work arrangements so the accounting, duty, and bond positions are correct, prepare the Part A and Part B transfer documentation for inter-unit movements, and keep the Annexure B accounts updated at all times. Having served 500+ importers and exporters since 2018, we keep bonded processing defensible. Learn more about our MOOWR scheme services or book a free consultation.
Yes. Circular No. 48/2020-Customs clarifies that a Section 65 unit, being a GST registrant, may perform job work for other units and must account for it under GST law.
Only inputs. Capital goods cannot be shifted to a job worker’s premises, though they may be sent out for repair with the bond officer’s permission. Moulds, jigs, tools, fixtures, patterns, and drawings may be sent for exclusive use.
The goods are deemed to have been cleared for home consumption on the date they were cleared for job work. Duty, interest, and penalties are reckoned from that date. The bond remains in full force.
Under Regulation 11, using a two-part form endorsed by both warehouse keepers, with one-time lock verification, quantity reconciliation, debit and re-credit of the respective triple duty bonds, and transit risk insurance.
Yes. A Section 65 unit may source capital goods or inputs from an SEZ or FTWZ. Supply of warehoused goods before clearance for home consumption is not liable to GST under Schedule III of the CGST Act.
