Overview
India allows manufacturing and other operations in a bonded manufacturing facility to promote India as the manufacturing hub globally and the commitment towards ease of doing business,
Customs (CBIC) has announced a scheme of Customs Bonded manufacturing cum warehousing commonly known as MOOWR i.e. Manufacturing and other operations in a Warehouse.
Central Board of Indirect Taxes (CBIC) is allowing import of raw materials and capital goods without payment of duty for manufacturing and other operations in a bonded manufacturing facility.
Most promising feature of the scheme is that unlike various existing schemes, the MOOWR scheme is delinked to the quantum/ obligation of exports and the benefit is also extended to the importers who import the goods for domestic clearance/sell.
- Import material to factory and carry out the manufacturing or processing using these raw materials or Capital Goods;
- No duty upon export, the manufactured goods or processed goods, the corresponding BCD+IGST waived;
- For home consumption, Customs Duty and IGST needs to be paid at the time of removal from the factory i.e. bonded area – Deferral in payment of duty;
- After unlimited use there is no Interest upon removal of Capital Goods itself for the home consumption. Just Pay Customs Duty and IGST on the Capital goods – Huge cash flow benefit in case of new setting up/ expansion;
- No need to maintain positive NFE (Net Foreign Exchange Earnings)
- In case of manufacturing, no interest implication and the imported inputs/ capital goods can remain in the warehouse without any time limit – Working capital savings;
- License once obtained is valid for permanence unless cancelled. No hassles of periodic renewals.
- clearance of warehouse goods
- Transfer of goods from a warehouse: A licensee shall allow transfer of warehoused goods to another warehouse or to a customs station for export, with due intimation to the bond officer on the Form for transfer of goods from a warehouse.
- Removal of resultant goods for home consumption: A licensee may remove the resultant goods from warehouse for home consumption: Provided that a bill of entry for home consumption has been filed in respect of the warehoused goods contained in so much of the resultant goods and the import duty, interest, fine and penalties payable, if any, in respect of such goods have been paid.
- Removal of resultant goods for export: A licensee shall remove the resultant goods from the warehouse for export without payment of duties or under IGST refund, upon filing a shipping bill or a bill of export, as the case may be;
- Ease of bonded manufacturing
Common application cum approval form for a license for private bonded facility and permission for manufacturing and other operations
- Unlimited period of warehousing
Capital and non-capital goods (raw materials, components, etc.) can remain warehoused until clearance or consumption
- No geographical restriction
New manufacturing facility can be set up or an existing facility can be converted into a bonded manufacturing facility irrespective of its location in India
Maintain all records of manufacturing and other operations digitally in a single format
“A big step towards ‘Make in India’ elevation, it will attract huge foreign investment, generate employment and boost export. India will move in the direction of self-reliant with global manufacturing hub.”
2020-08-07
