Is There Any Interest Cost Under the MOOWR Scheme? (2026)

The MOOWR interest cost is nil on goods that are actually used in the Section 65 operation, and there is no time limit on how long they may remain warehoused. That is the scheme’s central working-capital benefit under the Customs Act, 1962.

But the common claim that no interest arises regardless of how long goods are stored is wrong, and the exception is expensive. Goods you never put to manufacture attract interest after 90 days.

Where the Interest-Free Position Comes From

Section 61(1) carves out warehouses where operations are permitted under Section 65. Capital goods may remain until their clearance. Other goods may remain until their consumption or clearance.

Because those goods fall outside the residual category, the 90-day interest clock in Section 61(2) does not run against them. Inputs consumed in manufacture, and capital goods installed and used, carry no interest for as long as they are held.

MOOWR Interest Cost on Goods Cleared As Such

Here is the exception. Circular No. 34/2019-Customs confirms that because a Section 65 warehouse also functions as a Section 58 warehouse, the licensee may import goods and clear them as such for home consumption under Section 68, on payment of import duties along with interest under sub-section (2) of Section 61.

Untouched goods sit in the residual category. Interest runs from the expiry of 90 days, computed on the duty payable at clearance. Circular No. 39/2013-Customs clarifies that the 90 days commences from the date the goods were deposited in the warehouse, not from any later event.

MOOWR Interest Cost: The Rate and Calculation

Interest under Section 61 is charged at the rate fixed by notification, presently 15 per cent per annum, on the amount of duty payable at the time of clearance determined under Section 15. Rates are notified by CBIC.

It runs from the expiry of the 90-day period until the date duty is paid. A separate and higher rate of 24 per cent applies where duty is demanded on contravention of the conditions of the warehousing bond under Section 59.

The Trading Trap

Tribunals have applied this squarely. A unit that warehoused goods but traded them rather than using them in manufacture was held liable to interest after 90 days, because the goods were not used for the intended purpose and therefore fell into the residual category.

If your model is to import finished goods, hold them in bond, and clear them unchanged, you are trading. The MOOWR interest cost applies from day 91, whatever your licence says.

Exports Attract No Duty and No Interest

Where resultant goods are exported from the warehouse under a shipping bill, no import duty is payable on the warehoused goods contained in them, so no interest can arise. Capital goods may also be exported after use under Section 69 without payment of duty.

The deferment on exported goods is not merely interest-free. The duty is remitted entirely.

Interest on Delayed Payment After Clearance

A separate stream applies once an ex-bond Bill of Entry has been filed. Interest under Section 47(2) is chargeable where duty is not paid within the prescribed working days of the Bill of Entry being returned for payment.

That is a payment-delay charge, distinct from the warehousing interest under Section 61(2). Both can arise on the same consignment.

Avoiding the MOOWR Interest Cost

Ensure goods entering the bonded facility are genuinely put to manufacture or other operations. Repacking, labelling, assembly, and kitting all qualify. Pure storage and onward sale of untouched stock does not.

Keep accounts of receipt, processing, and removal reconciled at all times, furnished monthly under Regulation 17. Where the warehouse is also used for non-Section 65 purposes, a monthly return in Form B applies, and those goods should be tracked separately so their interest position is visible.

How JPARKS INDIA Helps

At JPARKS INDIA, we model the interest exposure on any goods you would clear as such, structure operations so warehoused stock is genuinely processed, and keep the Annexure B accounts and Regulation 17 returns clean so an audit never reopens the position. Having served 500+ importers and exporters since 2018, we keep bonded facilities interest-free. Learn more about our MOOWR scheme services or book a free consultation.

Frequently Asked Questions

Q1. Is there any interest cost under the MOOWR scheme?

No interest arises on goods used in the Section 65 operation, which may remain warehoused until consumption or clearance. Interest under Section 61(2) applies to goods cleared as such, beyond 90 days from deposit.

Q2. When does the 90-day interest period begin?

From the date the goods are deposited in the warehouse, per Circular No. 39/2013-Customs, not from any later event such as the filing of the ex-bond Bill of Entry.

Q3. What is the rate of interest on warehoused goods?

Presently 15 per cent per annum under Section 61, on the duty payable at clearance. A higher rate of 24 per cent applies where duty is demanded on contravention of the warehousing bond under Section 59.

Q4. Do exports from a MOOWR unit attract interest?

No. No import duty is payable on warehoused goods contained in exported resultant goods, so no interest arises. Capital goods exported after use also attract no duty under Section 69.

Q5. Is interest payable if I trade goods from a MOOWR unit?

Yes. Goods that are not put to manufacture fall into the residual category and attract interest from the expiry of 90 days, computed on the duty payable at clearance.

Related guides

• Start here: What is the MOOWR Scheme in Customs?
• Does MOOWR Have Any Export Obligation?
• Disadvantages of the MOOWR Scheme: The Real Costs (2026)
• Legal Approvals Required for the MOOWR Scheme (2026)
• Can E-Commerce Businesses Use the MOOWR Scheme? (2026)
• Free export import tools and calculators

If you want this done without the back and forth, we provide MOOWR approval support.