MOOWR machinery imports are permitted and the deferment is genuinely powerful. A unit licensed under Sections 58 and 65 of the Customs Act, 1962 may import capital goods and warehouse them without payment of Basic Customs Duty or IGST, with no interest and no time limit.
The critical question is not whether you can import the machine. It is how you eventually take it out, because the two exit routes are treated very differently.
CBIC has answered this directly. Depreciation is not available where imported capital goods on which duty has been deferred are cleared for home consumption after use in a Section 65 unit.
You pay duty on the original assessed value of the machine, however many years it has run. For a facility built on crores of imported equipment, that is a substantial deferred liability, and it does not shrink with time.
The asymmetry is striking. Imported capital goods on which duty was deferred may be exported after use without payment of duty under Section 69, and the duty is nil irrespective of the price at which the machine is sold.
A machine imported at one value and exported five years later at a lower one attracts no duty on either figure. Valuation of the export goods follows Section 14 read with the Customs Valuation (Determination of Value of Export Goods) Rules, 2007. If your machinery has a plausible export route at end of life, the economics change entirely.
On MOOWR machinery imports, both BCD and IGST stand deferred until the capital goods are cleared for home consumption or exported. No interest accrues, and there is no time limitation on how long the machine may remain warehoused.
Capital goods must be installed and used within the bonded premises. There is no minimum investment threshold and no geographic restriction.
This point is often missed and it is commercially significant. The deferred duty on capital goods is not incorporated into the finished goods. No extra duty is payable on products cleared into the domestic tariff area on account of the imported machine used to make them.
Duty on the capital goods becomes payable only if the capital goods themselves are cleared into the domestic market.
Neither the Regulations nor the Circulars issued by CBIC place a specific restriction on second-hand capital goods entering a Section 65 unit, unlike EPCG. For a manufacturer relocating a production line or acquiring used equipment, this is a meaningful difference for MOOWR machinery imports.
EPCG grants outright exemption on capital goods, but demands export of six times the duty saved within six years, plus maintenance of average export obligation, with recovery and interest on default. MOOWR imposes no export obligation at all.
The trade-off is that MOOWR defers rather than exempts, allows no depreciation on DTA clearance, and forfeits RoDTEP and duty drawback on goods manufactured in the Section 65 warehouse. EPCG holders retain both.
Under Section 15(1)(b), the rate of duty on goods cleared from a warehouse is the rate in force on the date the ex-bond Bill of Entry for home consumption is presented.
That means you may claim any exemption available under a Customs Tariff notification as on that date, not the date of original import. Capital goods may also be sent outside the unit for repair with the bond officer’s permission, though they cannot be shifted to a job worker.
At JPARKS INDIA, we model machinery imports under MOOWR against EPCG and IGCR on your actual duty rates, expected asset life, and whether an export exit is plausible, so the no-depreciation position is priced in before you commit capital. We prepare the application, structure the Section 59 bond, and maintain the Annexure B accounts. Having served 500+ importers and exporters since 2018, we make capital equipment decisions quantitative. Learn more about our MOOWR scheme services or book a free consultation.
Yes. Capital goods may be imported into a Section 65 unit with BCD and IGST deferred, no interest, and no time limit. Duty becomes payable only if the machinery is cleared into the domestic market.
No. Depreciation is not available where imported capital goods on which duty was deferred are cleared for home consumption after use in a Section 65 unit. Duty falls due on the original assessed value.
No duty is payable. Capital goods may be exported after use under Section 69 without payment of duty, irrespective of the price at which they are sold. Export valuation follows the Export Goods Valuation Rules, 2007.
No. The duty on capital goods is not incorporated into the finished goods. No extra duty is payable on products cleared into the DTA on account of the imported machinery.
Yes. No specific restriction has been placed on the import of second-hand capital goods into a Section 65 unit, unlike under EPCG.
