Question 1

What is the difference between MOOWR and traditional EOU duty-free manufacturing?

Accepted Answer

MOOWR (Manufacture for Overseas in Warehoused area) streamlines the traditional EOU/SEZ manufacturing framework by eliminating separate bond execution requirements for each raw material category and simplifying customs clearance procedures. Traditional EOU manufacturing requires warehousing licenses under Section 57 of the Customs Act with separate duty bonds; MOOWR consolidates these into a single authorization covering all approved raw materials, reducing documentation by 40-50% and enabling faster clearance (2-5 days vs. 7-15 days). However, both frameworks provide identical duty exemption benefits (100% exemption of basic customs duty and IGST on inputs).

Question 2

Can domestic suppliers be used under MOOWR, or only international suppliers?

Accepted Answer

MOOWR permits procurement from both domestic and international suppliers. Domestic inputs sourced under MOOWR are treated as deemed exports, meaning suppliers can claim input tax credit (ITC) under GST rules without actual export. International suppliers' consignments are cleared under import procedures with full duty exemption. The unit must maintain separate inventory records for domestic vs. international sourced materials and report both categories in monthly reconciliation statements filed with Customs.

Question 3

What happens if raw materials procured under MOOWR are accidentally diverted to domestic sales?

Accepted Answer

Diversion of duty-free inputs to domestic market constitutes a Customs violation under Section 111(d) of the Customs Act, 1962. Consequences include: immediate confiscation of diverted goods, imposition of penalty equal to 25% of goods' value, recovery of exempted duty (basic customs duty + IGST), interest penalty at 30% per annum, and potential cancellation of MOOWR authorization for 12 months. Additionally, unit may face prosecution under Section 132 (cognizable offense). The unit's compliance record is flagged in CBIC CRMS, affecting future authorization renewals and other customs-related licenses.

Question 4

How long does MOOWR authorization remain valid and what is the renewal process timeline?

Accepted Answer

MOOWR Authorization Certificate is valid for 3 financial years from date of issuance. Renewal must be initiated 90 days before expiry by filing fresh application incorporating updated manufacturing details, current IEC/EOU/SEZ certificates, and compliance audit report. Renewal processing typically requires 30-40 days. If renewal application is not filed within the 90-day window before expiry, the authorization lapses, and unit loses warehoused manufacturing privileges until a complete fresh application is submitted (requiring 45-60 days processing). Lapsed authorization results in duty liability on any pending raw material inventory.

Question 5

Are there any restrictions on the quantity of raw materials that can be procured under MOOWR?

Accepted Answer

MOOWR authorization specifies maximum annual input procurement limits based on historical export performance and estimated production capacity. For new units without prior export history, CBIC typically approves procurement limits equivalent to 12 months of projected output calculated from machinery capacity and production planning documents. Requests to increase procurement limits mid-year require submission of updated production projections and export orders; amendments are processed within 15-20 days if within the same product category. Procurement beyond authorized limits attracts duty liability on excess quantities plus 10% penalty.

MOOWR Scheme

What is MOOWR Scheme?

Pricing

Process

Documents Required

Frequently Asked Questions

Related Services

By category

Ready to get started?