Introduction
MOOWR is designed to defer customs duty and taxes, but many businesses are concerned about possible interest liability. Understanding when interest applies helps in proper planning and compliance.
No Interest During Bonded Period
As long as imported goods remain inside the bonded warehouse, no customs duty or IGST is payable. During this bonded period, no interest is charged by Customs, regardless of how long the goods are stored.
Interest on Domestic Clearance Delay
Interest becomes relevant only after goods are cleared for domestic consumption. If customs duty or IGST is not paid on time after such clearance, interest may be charged from the due date until payment.
Exports Do Not Attract Interest
When goods or finished products are exported directly from the MOOWR warehouse, no duty or IGST is payable. Since there is no tax liability, no interest arises.
Importance of Timely Payment
To avoid interest costs, businesses must ensure that duty and IGST are paid promptly whenever goods are cleared into the domestic market.
Record Accuracy Matters
Incorrect declarations, delayed reporting or mismatches in records can lead to demands with interest. Strong internal controls help prevent such issues.
Conclusion
MOOWR itself does not carry any interest cost during bonded storage. Interest applies only if duty payment is delayed after domestic clearance, making timely compliance the key to avoiding extra costs.
Learn more about MOOWR scheme at https://www.jparks.co/services/apply-for-moowr-scheme/
