What is MOOWR?
MOOWR is the Manufacture and Other Operations in Warehouse (No. 2) Regulations, 2019, made under section 65 of the Customs Act, 1962, with the procedure set out in CBIC Circular 34/2019-Customs dated 1 October 2019. Section 65 allows manufacturing and other operations inside a customs bonded warehouse, with the permission of the jurisdictional Principal Commissioner or Commissioner of Customs.
The premises must also be licensed as a private bonded warehouse under section 58. The section 58 licence and the section 65 permission can be applied for together, in one form (Circular 34/2019, para 4; Annexure A).
Unlike EOU and SEZ schemes, MOOWR does not prescribe an export obligation or a minimum value addition. A MOOWR unit can manufacture or carry out other permitted operations and sell its finished goods in India or export them, subject to customs and other statutory requirements. The key benefit is the flexibility to serve both domestic and export markets while deferring customs duty on imported inputs and capital goods.
For background, see our earlier article, MOOWR 2019: Manufacture and Other Operations in Warehouse.
How does duty deferment work under MOOWR?
- On import into the warehouse, customs duty on inputs and capital goods is deferred. The goods move into the bonded warehouse on an into-bond bill of entry.
- Time limit: since the Finance Act, 2016, capital goods and other goods for use in a section 65 warehouse can stay until they are consumed or cleared, with no maximum warehousing period (section 61(1)(a) and (b)).
- On export, the finished goods are exported on a shipping bill, and no duty is payable on the imported goods contained in them (section 69; Circular 34/2019, para 7).
- On clearance into India (DTA), the finished goods are a supply under GST and are cleared on an ex-bond bill of entry, paying the import duties on the imported inputs they contain (Circular 34/2019, para 8). GST is charged on the supply as usual.
- Waste and scrap cleared for home consumption attract customs duty and GST (para 9).
Is interest payable on capital goods under MOOWR?
Generally, no. Under section 61(1)(a), capital goods for use in manufacturing or other operations in a section 65 warehouse may stay warehoused until they are cleared, with no maximum period. Since the Finance Act, 2016, interest under section 61(2) applies only to the residuary category of warehoused goods, and courts, including the Rajasthan High Court in 2026, have held that it is not payable on such capital goods, even when they are cleared for home consumption. The customs duty itself is paid at the time of clearance.
What is the triple-duty bond?
The licensee executes one general bond (Annexure C of Circular 34/2019) that serves both section 59 and MOOWR. Its value is three times the duty on the warehoused goods, and it covers duty, interest, fines and penalties. The bond is debited as goods come into the warehouse and re-credited as they are exported or cleared, and it stays in force while goods are out for job work (Annexure C).
What records and returns does MOOWR need?
- Annexure B records of every receipt, processing step and removal, including goods sent out and returned from job work with their delivery challans (Circular 34/2019, para 6; Annexure B).
- Records are kept digitally and the monthly Annexure B return goes to the bond officer by the 10th of the following month (Annexure A, Part II).
- The warehouse must be declared as a principal or additional place of business under GST (para 5).
Job work and moving goods between bonded units
Goods can go out for job work and come back under the same bond. Moving warehoused goods to another warehouse needs the proper officer's permission under section 67. Eligible resultant goods can move between MOOWR section 65 units without prior permission (regulations 13–15 of MOOWR, 2019; Circular 34/2019, para 15), subject to the prescribed documents, intimation, a debit or re-credit of the triple-duty bond, transit security and record-keeping.
Why is MOOWR hard to run without a system?
- Every receipt, issue to production, job-work movement, transfer, export and DTA clearance has to be recorded against the bonded stock.
- The duty on imported inputs contained in each DTA clearance has to be worked out from the bill of materials.
- The triple-duty bond balance changes with every movement and must never be exceeded.
- Groups with several MOOWR units have sales and purchases between their own bonded units, which must be recorded on both sides.
- The monthly Annexure B has to tie back to SAP stock and accounting.
How do OptiEXIM and OptiEXIMc handle MOOWR in SAP?
- Every movement type captured in SAP, including MOOWR-to-MOOWR sales and procurement from other MOOWR units, across locations and group companies.
- Duty computation on DTA clearance from the applicable customs duty rates and the bill of materials.
- Consumption tracking at warehouse and location level.
- Job-work tracking: dispatch, receipt and reconciliation.
- Bond management, including the triple-duty bond, centralised and monitored.
- Annexure B generated automatically, and MOOWR records reconciled with SAP stock and documents.
Two of our customers run MOOWR this way: an automotive components group across several locations and an energy technology company.
Frequently asked questions
What is MOOWR?
The Manufacture and Other Operations in Warehouse (No. 2) Regulations, 2019, under section 65 of the Customs Act. It allows manufacturing in a customs bonded warehouse with customs duty on imported inputs and capital goods deferred.
Is customs duty waived under MOOWR?
Duty on imported goods is not payable on finished goods that are exported. It is deferred, not waived, for goods cleared into India: the import duty on the inputs they contain is paid at clearance.
Is there an export obligation under MOOWR?
No. A MOOWR unit can export or sell in India. If finished goods are sold in India, the deferred duty on the imported inputs is paid; if they are exported, the deferred duty is not payable.
What is the triple-duty bond?
A general bond under section 59 and MOOWR (Annexure C of Circular 34/2019) for three times the duty on the warehoused goods, debited and re-credited as goods move.
What is Annexure B under MOOWR, and when is it due?
The prescribed format for records of receipts, processing and removals in the bonded warehouse. The monthly return goes to the bond officer by the 10th of the following month.
Is interest payable on capital goods imported under MOOWR?
Generally no. Capital goods for use in a section 65 warehouse can stay until cleared, with no maximum period, and interest under section 61(2) does not apply to them, as courts have held. Customs duty is paid at clearance for home consumption.
Can goods be sent for job work under MOOWR?
Yes. Goods can go out for job work and return under the same bond, recorded with delivery challans in Annexure B.
How do OptiEXIM and OptiEXIMc help with MOOWR?
They capture every bonded movement in SAP across locations, compute duty on DTA clearances from the bill of materials, track job work and consumption, manage the triple-duty bond and generate Annexure B automatically.
Sources
This guide summarises the rules for general information and is not legal advice. Check the current notifications before acting on them.