MOOWR vs EPCG: Which One Saves More Duty?

Introduction
MOOWR and EPCG are both duty saving mechanisms for import of goods used in manufacturing. However, the way duty benefit is achieved and the actual savings differ significantly.

Nature of Duty Benefit
MOOWR works on the principle of duty deferment. Customs duty and IGST are not paid at the time of import and are payable only when goods or finished products are cleared into the domestic market. If goods are exported, no duty is paid.
EPCG provides upfront duty exemption on import of capital goods, but the exemption is conditional.

Export Obligation Impact
MOOWR has no export obligation. Duty saving depends on how much is exported and how long duty payment is deferred, leading to major working capital savings.
EPCG requires fulfillment of a specific export obligation, usually multiple times the duty saved. Failure leads to duty recovery with interest.

Scope of Goods
MOOWR covers both raw materials and capital goods. This widens the duty saving base.
EPCG applies only to capital goods, not consumables or raw materials.

Cash Flow and Risk
MOOWR saves interest cost and improves cash flow by deferring duty indefinitely.
EPCG saves duty upfront but carries compliance risk and long term export pressure.

Which Saves More Duty
In absolute terms, EPCG waives duty only on machinery. MOOWR can save duty on machinery and inputs, making total savings higher, especially for import intensive units.

Conclusion
MOOWR generally saves more duty overall due to wider coverage and flexibility, while EPCG suits exporters confident of meeting export obligations. The better choice depends on business model, not just duty rates.

Learn more about MOOWR scheme at https://www.jparks.co/services/apply-for-moowr-scheme/