Duty mechanics
When — and how — MOOWR duty actually becomes payable
The single most misunderstood part of MOOWR. Get the duty trigger, interest treatment, and capital-goods waiver mechanics right, and the scheme works exactly as advertised.
Trigger event
Duty payable on removal of goods for home consumption (DTA sale). No removal — no duty. No interest under MOOWR, regardless of warehousing period.
Export route
Inputs consumed in exported finished goods: deferred duty extinguished permanently. Capital goods stay in the unit — no duty event on export of finished goods.
Capital goods
Duty triggered only when the capital asset is physically removed from the MOOWR unit (sale, scrap, transfer out). No pro-rata payment linked to FG clearances.
Worked example — DTA clearance
A MOOWR unit imports inputs valued at ₹5 crore (assessable value) at 7.5% BCD. After manufacture, finished goods incorporating these inputs (assessable proportion ₹5 crore) are sold into DTA. Duty payable at the time of ex-bond removal:
| Assessable value of inputs in DTA-cleared FG | ₹5,00,00,000 |
| Basic Customs Duty @ 7.5% | ₹37,50,000 |
| Social Welfare Surcharge @ 10% on BCD | ₹3,75,000 |
| IGST @ 18% on (AV + BCD + SWS) | ₹96,98,500 |
| Total payable on ex-bond removal | ₹1,38,23,500 |
Illustrative; actual rates depend on HS classification, FTAs, and notifications in force. IGST is creditable in the recipient's GST chain.
Capital goods — duty triggered only on physical removal
Imported capital goods warehoused under MOOWR enjoy indefinite duty deferment. The duty event is the physical removal of the capital asset from the MOOWR premises — not the clearance of finished goods manufactured on that asset. Continued use of the machinery within the unit, whether the output is exported or sold into DTA, does not trigger any duty on the capital goods themselves.
Asset stays in unit
No duty payable for as long as the capital goods remain installed and used within the MOOWR warehouse — even across decades of operation.
Removal events
Duty crystallises only on sale, scrap, transfer to a non-MOOWR location, or other physical exit of the capital goods from the unit.
Original CIF value
On removal, duty is computed on the original CIF value of the capital goods — with no depreciation adjustment and no interest, even after many years of use inside the MOOWR unit.
No interest under MOOWR — a defining advantage
Unlike standard Section 61 bonded warehousing, the MOOWR scheme carries no interest liability whatsoever on the deferred customs duty. Goods can remain warehoused indefinitely, and the eventual duty payment on DTA clearance is the original duty amount — without any interest accretion for the period of deferment. This is a statutory feature of MOOWR, not a discretionary clarification.
FAQs
When does duty become payable on goods warehoused under MOOWR?
Duty crystallises only at the time of removal of goods from the bonded warehouse for home consumption (DTA sale). For inputs that are physically incorporated into finished goods which are exported, the deferred duty stands extinguished and never becomes payable.
Is interest payable on duty deferred under MOOWR?
No. Under the MOOWR scheme, no interest is payable on the deferred customs duty — irrespective of how long the goods remain warehoused. This is one of the defining advantages of MOOWR over the standard Section 61 warehousing regime.
How is duty on capital goods handled under MOOWR?
Duty on imported capital goods is deferred indefinitely and becomes payable only when the capital goods are physically removed from the MOOWR unit (e.g. sold, scrapped or transferred to a non-MOOWR location). There is no pro-rata duty payment linked to clearance of finished goods — whether exported or sold into DTA — as long as the capital goods remain installed and in use within the unit. On eventual removal, duty is computed on the original CIF value of the capital goods, with no depreciation adjustment and no interest, even after many years of use.
Is any interest payable on capital-goods duty deferred for many years?
No. MOOWR carries no interest liability on deferred duty whatsoever. Even if imported capital goods remain in the MOOWR unit for a decade or longer and are then removed, the duty payable is the original duty amount on the original CIF value — without any interest for the period of deferment.
How is the ex-bond Bill of Entry filed?
An ex-bond BoE under Section 68 is filed via ICEGATE referencing the original warehouse BoE. Duty is paid by online challan and removal is permitted on Out-of-Charge by the Bond Officer.