What is the MOOWR Scheme Introduced by CBIC (Manufacturing and Other Operations Warehouse Regulations)?

MOOWR Scheme

MOOWR scheme full form Manufacturing and Other Operations in Warehouse Regulations scheme, was a tactical move by the (CBIC) Central Board of Indirect Taxes and Customs, introduced in 1996 and revamped in 2019 with the purpose of delaying customs duties on imported goods.

MOOWR scheme India was revamped in 2019 to support the “Make in India" initiative so as to provide a simple process of approval for manufacturing operations within a bonded warehouse.

What are the Objectives of MOTOR scheme?

The objectives of MOOWR scheme are to transform India into a competitive manufacturing

location and an attractive investment destination for leading businesses around the world.

This CBIC scheme of manufacturing was launched to defer custom duties on imported goods used for manufacturing or other activities such as re-labelling, re-packing, grading, sorting, testing, and repair.

Eligible Criteria for MOOWR Scheme

Individuals and businesses both are eligible to register for the Bonded Warehouse Manufacturing India scheme considering that they meet the criteria of Eligibility for MOOWR scheme as follows:

• Individuals or businesses that hold warehousing licences in compliance with the Private Warehouse Licensing Regulations, 2016.

• Individuals having warehousing licences along with permission to conduct manufacturing or other operations within the warehouse under section 65 of the Act are also eligible to register.

What is the Application Process for MOOWR scheme? (Step-by-Step Guide)

The Application process for the MOOWR scheme is quite simple. Following is the step-by-step guide on how to apply for MOOWR scheme:

• Step1 - Go to investindia.gov.in website, then click on “New Application”

• Step 2 - Filling the online application through Annexure A.

Fill Part-I Business Details

1. Business Details - 

Here Below Mandatory Details:-

• Name of the applicant

• PAN number

• GSTIN Number

• Importer Exporter code
  

2. Constitution of Business 

• Here you need to select the constitution of business from the options provided below.

• The following documents need to be uploaded mandatorily.

  • Certification of Incorporation

  • Memorandum of Objects

  • Article of Association in case of companies

Note - The documents need to be provided only in PDF, doc, docx and formats. Please note that the maximum size of the documents can be 5 MB.

3. Registered office details

Here we need to provide the following details mandatorily.

• Registered Office address

• Contact Number

• Business Email

• Fax (if any)

4. Bank details

Here we need to provide the Bank Name, Branch Name and Account Number mandatorily.

5. Details of Proprietor/ Partner/ Director

Here we need to provide Name, DPIN, Designation, and Address and we also need to attach a scanned copy of any ID proof. The Passport or Driving License is an acceptable document in this field.

Here it also has the option to add details of more than one Proprietor/ Partner/ Director.

Note- The format of the document should be PDF, doc, docx and the maximum file size should be 5 MB.

            

6. Authorised Signatory

We need to provide the Name of the Authorised Signatory and designation and also need to upload an Aadhar Card as proof of ID.

7. Details of existing manufacturing facilities in India or overseas

Here we need to select YES/NO.

Fill Part II-Details of Proposed Facility

1. Details of Proposed Facility

Here you need to provide 

• Address of proposed site/ building

• North, South, West and East Boundaries of the warehouse

• Details of property holding rights of the applicant, Whether Owned or Leased

• Contact details at the site/premises such as Contact Number, Contact Email, Fax, and Website (if any)
  

2. Details of Warehouse licence issued earlier (if any)

     Here you need to provide

• Date of Issue of License

• Commissionerate File No.

• A scanned copy of the warehouse licence

Note- The format of scanned copy should be only pdf, doc, docx and max file size 5 MB.

3. Whether the applicant is a licenced custom broker

You need to select yes or No

4. Whether the applicant is an authorised economic reporter

You need to select yes or No

5. Description of Premises

Here you have to provide

• The Ground Plan of the site indicating all necessary points as mentioned on the website (Document should be in only pdf, doc, docx and max file size 5 MB)

• Floor Area

• Number of Storeys

• Total area (or cubic capacity) available for stage

• Type of Construction of Walls or Roof

• Year of establishment of the building

• Date of remodelling of the building

• Premises have been authorised for commercial use by local Government Authorities? Yes or No

Note: The applicant must comply with the provisions of the Customs Act 1962, as well as with all other applicable compliances issued by the Government of India for doing business in India.

6. Goods proposed to be manufactured or other operations proposed to be carried out

Here you need to attach a document showing details of the Goods proposed to be manufactured or or other operations proposed to be carried out

Note: In case of any change in the nature of operations subsequent to the grant of permission, the same shall be informed to the Jurisdictional Commissioner of Customs within 15 days.

7. Security facilities at the premise, Existing or proposed

• Here you need to attach a scanned copy of the Fire security audit certificate issued by a qualified independent agency in the prescribed format

• Details of security personnel

• Burglar alarm system

• CCTV monitoring system

Part III - Applicant Details

Here you need to fill 

First name, Last name, contact no, company name, Designation, Applicant Email ID, Location.

Note: This Email ID is the most important one as all the details will be sent to this ID on submission.

And finally,

• A declaration needs to be given and an Undertaking Needs to be signed

• The signature of the Applicant/Authorised Signatory and Stamp

needs to be uploaded only in png, jpg, jpeg; Max. File Size: 5 MB 

After that date and place need to be mentioned, insert the Captcha code and click on the “Submit” tab.

Please note that if the Applicant needs to save and submit it later then, click on “Save And Submit Later”.

 

• Step 3- After submitting the Application in Annexure- A online, now the Applicant needs to execute a Bond and furnish it physically to the Jurisdictional Commissioner of Customs, who is a single point of contact.

• Step 4- The Jurisdictional Commissioner of Customs will then verify the application and premises and thereafter grant the license. 

Note: This license is valid for an indefinite period until it gets cancelled by the department or surrendered by the taxpayer himself.

What are the Salient Features of MOOWR scheme?

Simple Process of Approval

The jurisdictional Commissioner of Customs is the single point of approval under the MOOWR Scheme. Only one application-cum-approval form under Annexure A has been prescribed for use by both the applicants and Customs which reduces paperwork and causes ease to the applicants.

Types of Businesses covered

Any business desiring to conduct manufacture or any other operations can apply

under the MOOWR Scheme.

Ease of setting up

A new manufacturing facility can be set up or an existing one can be converted into a bonded facility regardless of its location under the Manufacturing and Other Operations in Warehouse Regulations scheme.

Digital Maintenance of Records

The records are maintained digitally in a standardised format which makes it easy to manage and track so as to produce when required.

Custom Duty Exemption

Exemptions on customs duty for imported materials used in making finished products are provided to the businesses.

Full flexibility in the clearance of finished goods

The goods produced under the MOOWR scheme can be exported or cleared to the domestic market as per demand. No export obligation is prescribed.

Monthly Reporting Obligation

Businesses need to report on a month-to-month basis to stay within the scheme.

No Minimum or Maximum Export or Domestic sale limits

There is no obligation of Minimum and maximum limits applicable which provides flexibility to the businesses.

What are the Key Benefits of MOOWR scheme for Manufacturers & Others?

MOOWR scheme benefits manufacturers in several ways, some of the benefits of the MOOWR scheme for manufacturers are as follows:

• A manufacturer whose MOOWR license can import raw materials and capital goods for manufacturing and other operations on deferred payment of Customs duty. If the manufactured goods are exported, the Customs duty becomes exempt.

• No time limit has been specified under the MOOWR scheme for storing goods and the license once granted under the MOOWR scheme does not need renewal.

• The unit's location is flexible, with no physical control by Customs and no export obligations. 

• Transferring from one warehouse to another is easy, and there's no minimum investment required for setting up a MOOWR unit.

What Are the Critical Areas Which Pose Challenges to Entrepreneurs?

Challenges for Entrepreneurs under the MOOWR Scheme are as follows:

• Depreciation is not available on used capital goods when supplied to the domestic market.

• All Industry Rate (AIR) drawback/ RODTEP is not available on MOOWR exports.

• Lack of clarity on the transfer of finished goods/intermediate goods/Work-in-Progress (WIP) between MOOWR units.

• Absence of a substantive provision in the form of an Act - MOOWR scheme operates through MOOWR scheme notification which largely depends on the government’s policy priorities. Due to the absence of an Act MOOWR scheme pdf and MOOWR scheme ppt provided by the CBIC are the only sources of information and clarification for its users.

• Non-availability of an online portal for submission of monthly returns/registers.

Conclusion

MOOWR scheme not just benefits a taxpayer in the form of working capital savings to the extent of duty deferment but it also helps manufacturers in performing operations with flexibility without giving them burden of time-consuming compliances and procedural requirements. MOOWR scheme brings efficiency in the whole supply chain, which improves ‘ease of doing business’ but also reduces manufacturing costs. MOOWR scheme code entails a significant cash-flow advantage as it does not mandate upfront payment of duty at the time of import, but only when finished goods are sold in the domestic market.

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