Yes, a MOOWR surrender is permitted, and the procedure is defined under the Customs Act, 1962. Because a Section 65 unit is also licensed as a private bonded warehouse under Section 58, surrender follows the Private Warehouse Licensing Regulations, 2016. A written request to the Principal Commissioner or Commissioner of Customs starts the process.
Before you plan an exit, understand the number that catches most units out. No depreciation is allowed on capital goods.
This is the most expensive fact in the whole exit calculation, and it is widely misunderstood. CBIC has confirmed that depreciation is not available where imported capital goods on which duty was deferred are cleared for home consumption after use in a Section 65 warehouse.
You pay duty on the original assessed value of the machinery, not its depreciated value, however long it has been running. Compare IGCR, where capital goods cleared after use attract duty on the depreciated value computed on a straight line basis. MOOWR offers no such relief.
The sequence is straightforward but unforgiving on timing:
If any bonded goods are intended for export, that export must be completed before the MOOWR surrender takes effect. Once the licence is gone, the duty-free export route closes and the remaining stock can only be cleared on payment of duty.
This single sequencing error is one of the most common and costly mistakes in a MOOWR exit.
Under Section 15, the rate of duty and tariff value applicable on clearance from a bonded warehouse is the rate in force on the date the Bill of Entry for home consumption is presented under Section 68.
The value is the value assessed on the into-bond Bill of Entry when the goods were originally warehoused. Where goods are cleared as such, without having been put to manufacture, interest under Section 61(2) also applies.
Cancellation is a different route from MOOWR surrender, with a hard deadline. Where a licence issued under Section 57, 58, or 58A is cancelled by CBIC, the warehoused goods must be removed within seven days of the cancellation order being served, or such extended period as the proper officer allows.
Goods may go to another warehouse, be cleared for home consumption, or be exported. The warehousing provisions continue to apply to those goods until they are removed. Cancellation itself requires notice and a hearing under Section 58B.
MOOWR governs customs duty, but GST obligations continue. Once goods are ex-bonded and sold in India they become ordinary taxable supplies. Update invoicing, returns, and tax codes from the exit date, and keep the premises registered as a place of business until all stock has moved.
Retain your records after cancellation. Reconciled accounts, ex-bond Bills of Entry, and duty payment evidence should be archived for the period required by law.
A clean MOOWR surrender takes roughly eight to ten weeks. Begin with stock verification and back-filing of returns, then submit the application with reconciliations six to eight weeks out, and use the final weeks for customs verification, ex-bond Bills of Entry, duty payment, and completing exports or transfers.
At JPARKS INDIA, we run MOOWR debonding end to end. We reconcile physical stock against the prescribed accounts, clear outstanding returns, compute the exit duty including the capital goods position, sequence exports ahead of surrender, prepare the application, and pursue bond cancellation. Having served 500+ importers and exporters since 2018, we close bonded facilities without surprises. Learn more about our MOOWR scheme services or book a free consultation.
Yes. A licensee may surrender the licence by written request to the Principal Commissioner or Commissioner of Customs. The licence is cancelled subject to payment of all dues and clearance of remaining bonded goods.
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 warehouse. Duty falls due on the original assessed value.
No. Any intended export must be completed before the licence is surrendered. Afterwards the remaining stock can only be cleared on payment of duty.
The warehoused goods must be removed within seven days of the cancellation order being served, or an extended period allowed by the proper officer, either to another warehouse, for home consumption, or for export.
The triple duty bond executed under Section 59, in the format at Annexure C of Circular No. 34/2019-Customs. It must be settled along with any outstanding duty, interest, or penalty.
