MOOWR is often sold as a free lunch: import without paying duty, export without ever paying it, sell in India and pay only then, with no export obligation and no expiry. Most of that is true. What the pitch leaves out is that the licence turns part of your premises into a customs bonded warehouse, with a bond, an insurance policy, a monthly return and a customs officer who can count your stock at any time, and that goods made under it lose RoDTEP and drawback. This guide sets out exactly how the licence is obtained and run, so you can judge whether it is worth it.
To operate under MOOWR, a business applies to the jurisdictional Principal Commissioner or Commissioner of Customs for a private bonded warehouse licence under Section 58 and permission to manufacture under Section 65 of the Customs Act, in one combined application filed on the ICEGATE online module (live since November 2025 under Circular 28/2025-Customs). The premises must be commercial, demarcated and declared on the GST registration. After site verification, the licence is granted with no expiry, and the business executes a bond for three times the duty and an all-risk insurance policy. There is no statutory fee, no minimum investment and no export obligation. A realistic end-to-end timeline is 8 to 12 weeks.
The legal framework
MOOWR is not a standalone statute. It is a warehouse licence plus a permission to manufacture in that warehouse, both administered by the same customs officer.
| Provision | What it does |
|---|---|
| Section 58, Customs Act, 1962 | Licensing of a private bonded warehouse |
| Section 65 | Permission to carry out manufacture and other operations on warehoused goods |
| Section 59 | Bond for three times the duty on warehoused goods |
| Section 61 | Warehousing period; the interest under Section 61(2) does not apply to goods under Section 65 |
| Sections 68 and 69 | Clearance of warehoused goods for home consumption or export |
| Section 73A | Custody of and responsibility for warehoused goods |
| MOOWR (No. 2) Regulations, 2019 | Notification 69/2019-Customs (N.T.) dated 1 October 2019: application, receipt, removal, records and returns |
| Circular 34/2019-Customs | The operative procedure: Annexure A (application), Annexure B (records and monthly return), Annexure C (bond) |
| Circular 48/2020-Customs | Job work by a Section 65 unit |
| Circular 28/2025-Customs | Online module for MOOWR (and MOOSWR) permissions on ICEGATE 2.0, from November 2025 |
| Section 65A | Enacted by the Finance Act, 2023 but not yet brought into force. If notified, IGST and compensation cess would become payable upfront, leaving only basic customs duty deferred |
Who can apply and the pre-conditions
Any person who intends to carry on manufacture or other operations on imported goods can apply. There is no minimum investment, no minimum turnover, no export obligation and no location restriction. "Other operations" is interpreted broadly and covers assembly, testing, repair, refurbishment and similar activities. Before filing, make sure that:
- Neither the applicant nor any partner or director has been penalised, convicted or prosecuted under the Customs Act, the Central Excise Act, the Finance Act, 1994 (service tax), or the CGST or IGST Acts, and no criminal or bankruptcy proceedings are pending.
- The premises are authorised for commercial use by the local authority. A residential address will not be licensed.
- You hold clear title, or a registered lease with a landlord no-objection letter that specifically permits use as a customs bonded warehouse.
- The premises are declared as the principal or an additional place of business on your GST registration.
- A warehouse keeper has been identified, and your accounting system can produce digital records in the prescribed format.
The licence process, step by step
- Decision gateWeek 1
Quantify the real duty pool (basic customs duty, social welfare surcharge and anti-dumping duty, never IGST), the RoDTEP and drawback you will lose, and the cost of running a bonded facility. Check whether a classification or sourcing fix does the job without a scheme. Proceed only if the net result is positive. - Scope of goods and normsWeeks 1 to 3
Decide which imported inputs and capital goods to bring under the bond. Not every import has to be covered, but bonded and non-bonded stock must be kept apart. Prepare the bill of materials and input-output norms, with normal wastage, for each resultant product. - Premises and documents in parallelWeeks 2 to 6
Demarcate and secure the bonded area, obtain the fire safety certificate, landlord NOC and solvency certificate, and complete the GST amendment if the premises are not on the registration. - Online application on ICEGATEWeek 6 or 7
Register on the ICEGATE warehouse licensing module with GSTIN verification and OTPs to the mobile number and email recorded on the GST registration. The system issues a reference ID valid for 15 days, within which the application has to be completed and submitted with uploads. Check the jurisdictional Commissionerate's public notice for any physical copy it also wants. - Antecedent check and site verification2 to 4 weeks
Customs verifies the antecedents of the business and its partners or directors, raises queries through the portal and inspects the premises once. - Grant of licence and permission1 to 2 weeks
The licence under Section 58 and permission under Section 65 are issued together, with a warehouse code. The licence has no expiry and needs no renewal. - Go-live2 to 3 weeks
Execute the bond and insurance, give the Section 73A undertaking, appoint the warehouse keeper, register the bond at the port, brief the customs broker on into-bond bills of entry, and set up the accounting system before the first consignment.
Documents and information required
Entity and people
- Certificate of incorporation, LLP agreement or MoA and AoA, PAN, IEC and GST registration certificate
- Name, designation, address, PAN, Aadhaar and DIN of each partner or director, with ID proof
- Board or partners' resolution and authorisation letter for the signatory
- Audited financial statements for the last two years
- Details of any other manufacturing facility in India or abroad, and of any existing customs licences, AEO status or customs broker licence
Premises
- Ownership document or registered lease, and the landlord's NOC for customs bonded warehousing
- Evidence of commercial-use approval from the local authority
- Site plan showing the bonded area, areas occupied by others, all entry and exit points, doors and windows
- Boundaries, total and bonded floor area, number of floors, wall and roof construction, year of construction
- Photographs of the entrance, boundary, storage area, work area, floor and roof
- Fire safety audit certificate from a qualified agency; details of alarm, CCTV and security staffing
Operations, goods and money
- Description of the operations and a process flow chart
- Imported and domestic inputs, intermediate products, finished products and waste, each with the 8-digit tariff code
- Quantity of each input per unit of output and normal wastage, the single most important document in the file
- Job worker name, address, GSTIN and agreement, if any operation is outsourced
- Expected annual imports and exports, and the peak value of warehoused stock and the duty on it
- Bank details and a solvency certificate from a scheduled bank
Premises readiness checklist
You do not have to bond the whole factory or office. A demarcated section is enough and is usually preferable.
| Item | What customs expects to see |
|---|---|
| Demarcation | Walled or partitioned area with a single, lockable, controlled entry |
| Signage | "Private Customs Bonded Warehouse, Section 65 of the Customs Act, 1962, Licence No. ___" at the entry |
| Segregation | Marked zones for duty-deferred imported inputs, work in progress, finished goods, and scrap or defectives |
| Domestic stock | Duty-paid stock stored separately and never mixed with warehoused goods |
| Labelling | Bin locations that map to the godown and batch structure in your accounts, so a physical count ties to the record |
| Surveillance | CCTV over the entry and storage area with archived footage. Strictly a public-warehouse rule rather than a MOOWR mandate, but most Commissionerates expect it |
| Fire safety | Extinguishers, detectors and a valid fire safety certificate |
| Records point | A terminal from which the digital records can be shown to the visiting officer |
Bond, insurance and security
Section 59 requires a bond for three times the duty on the warehoused goods. The Annexure C format to Circular 34/2019 serves both MOOWR and Section 59, so one bond is enough, and it can be a running bond covering a rolling value of stock. Size it at three times the duty on the highest value of warehoused goods you expect to hold at any one time, with headroom. An undersized bond stalls clearances at the port; an oversized one costs only stamp duty.
The prescribed bank guarantee for Section 65 units is nil, so in the normal course the security is the bond plus an all-risk insurance policy on the warehoused goods, taken in favour of the President of India through the Deputy or Assistant Commissioner of Customs. The officer can still ask for additional security in specific cases. The insurance is a real annual cost and must not lapse.
How it works once licensed
- Import. File an into-bond bill of entry quoting the warehouse code. No basic customs duty, surcharge, anti-dumping duty or IGST is paid. The goods move to the warehouse under the prescribed transfer procedure, and receipt must be acknowledged to the bond officer in time.
- Domestic inputs. Bought on normal GST invoices with input credit, but recorded and stored separately.
- Job work. Under Circular 48/2020-Customs, imported goods must first be received at the licensed premises; only inputs, and moulds, jigs and tools, may be sent out for job work, on a delivery challan under the GST job work procedure. A direct port-to-job-worker route is not available.
- Export. No duty is payable on the imported content of exported goods. Resultant goods may be exported directly from the job worker's premises, but the acknowledgement from the customs station of export must reach the bond officer within one month of removal, or the full duty becomes payable.
- Domestic sale. File an ex-bond bill of entry and pay the deferred duty on the imported content, with no interest under Section 61(2), plus GST on the supply.
- Scrap. Recorded separately; duty is payable on waste cleared into India.
- Transition. Existing duty-paid stock cannot be brought into the bond. Plan a clean cut-over, ideally at a quarter or financial-year boundary, and expect duty-paid and bonded batches of the same part to run side by side for some months.
Records, monthly return and audit
| Requirement | Detail |
|---|---|
| Records format | Annexure B to Circular 34/2019, digital, covering receipt, processing and removal |
| Basis | Batch or lot traceable to the bill of entry, consumed first in first out, with imported and domestic goods separately identified |
| Monthly return | To the bond officer within ten days of month end, every month, including nil months |
| Changes | Any change in the operations to be reported to the Commissioner within 15 days |
| Retention | At least five years from removal of the goods, with an off-site backup |
| Audit | Stock verification on demand, desk scrutiny of returns, and risk-based on-site post-clearance audit, usually every one to two years |
Neither Tally nor Zoho Books produces the Annexure B format natively. Both can carry the data if godowns, batches keyed to the bill of entry number, bills of materials and manufacturing journals are set up properly, with either a small customisation or a fixed monthly spreadsheet bridge for the return. Deferred duty should also be tracked in a memorandum register, because it is a contingent liability until the goods are exported. The single failure that turns an audit into a demand is duty-free and duty-paid stock of the same part in the same location with no batch discipline.
Cost and timeline
| Head | One-time | Recurring per year |
|---|---|---|
| Premises works: partition, secure door, racking, signage | ₹1.5 – 4 lakh | – |
| CCTV and storage | ₹0.6 – 1.2 lakh | ₹10,000 – 15,000 |
| Fire safety compliance | ₹0.5 – 1.5 lakh | – |
| Layout plan, stamp duty, notarisation, bank charges | ₹0.4 – 1 lakh | – |
| Accounting set-up and return format | ₹0.4 – 1 lakh | – |
| All-risk insurance on bonded stock | – | ₹0.5 – 1.5 lakh |
| Monthly returns, records and bond administration | – | Depends on volume |
| Extra logistics leg if a job worker is used | – | Depends on volume |
Third-party cost ranges for a small to mid-sized unit, for planning only; replace them with quotations. Professional fees are quoted separately after scoping. The binding constraint on timing is premises readiness and document completeness, not the department.
Common causes of delay and rejection
- Premises not authorised for commercial use, or a residential address on the lease
- A landlord NOC that mentions commercial use but not customs bonded warehousing
- Bonded area not physically demarcated at the site visit
- Premises missing from the GST registration
- A vague description of operations, or norms that do not tie to a bill of materials
- An incomplete antecedent declaration for one partner or director
- A solvency certificate for a different amount from what the Commissionerate expects
- No demonstrable system for producing the digital records
- An outsourced manufacturing model that is not explained upfront: if all processing happens at a job worker, the officer will ask what operation takes place in the warehouse itself
On exit, deferred duty on all warehoused stock becomes payable and the bond is cancelled only after everything is accounted for, so peak stock is also your exit cost. If you are still deciding between schemes, read MOOWR vs Advance Authorisation first. Our export incentives service covers both the decision study and the licence.
Frequently Asked Questions
MOOWR, the Manufacture and Other Operations in Warehouse Regulations, 2019, lets a business licence part of its premises as a private bonded warehouse under Section 58 of the Customs Act and manufacture there under Section 65. Imported inputs and capital goods come in without paying duty; no duty is paid on goods exported, and duty on goods sold in India is paid only at clearance, without interest.
Apply to the jurisdictional Principal Commissioner or Commissioner of Customs through the ICEGATE online module operationalised by Circular 28/2025-Customs. A single application covers both the Section 58 licence and the Section 65 permission. After antecedent and site verification, the licence is granted, and the business executes a bond and insurance before starting operations.
No statutory application fee is prescribed under Circular 34/2019-Customs. The costs are practical ones: preparing the premises, fire safety compliance, stamp duty on the bond, insurance on the warehoused goods, accounting set-up and professional fees.
Realistically 8 to 12 weeks from start to the first into-bond consignment. Most of that time goes on preparing the premises and assembling documents such as the landlord NOC, fire safety certificate and solvency certificate. The application, verification and grant typically take 3 to 5 weeks once the file is complete.
Normally not. The security is a bond for three times the duty on the warehoused goods under Section 59, in the Annexure C format, plus an all-risk insurance policy. The prescribed bank guarantee for Section 65 units is nil, though the proper officer may ask for additional security in specific cases.
Yes. Under Circular 48/2020-Customs, imported inputs must first be received at the licensed premises and can then be sent out for job work on a delivery challan; moulds, jigs and tools may also be sent. Capital goods go out only for repair. Finished goods can be exported directly from the job worker, provided the export acknowledgement reaches the bond officer within one month.
Within ten days of the end of each month, in the digital Annexure B format prescribed by Circular 34/2019-Customs, for every month the licence is in force, including months with no activity.
Sources and law referred to
- Authority: CBIC. Title: Customs Act, 1962, sections 58, 59, 61, 65, 65A, 68, 69 and 73A; Manufacture and Other Operations in Warehouse (No. 2) Regulations, 2019, Notification 69/2019-Customs (N.T.). View Source. Accessed: November 2026.
- Authority: CBIC. Title: Circular 34/2019-Customs dated 1 October 2019; Circular 48/2020-Customs dated 27 October 2020; Circulars 19/2025, 27/2025 and 28/2025-Customs. View Source. Accessed: November 2026.
- Authority: CBIC, ICEGATE. Title: Warehouse licensing module user manual. View Source. Accessed: November 2026.
- Authority: Directorate General of Foreign Trade. Title: Foreign Trade Policy 2023, para 4.55 (RoDTEP ineligible categories); Notification 77/2023-Customs (N.T.), condition 9 (drawback). View Source. Accessed: November 2026.
Positions are as read on November 4, 2026. Export incentives are notified for fixed periods and change often; confirm the notification in force on the date of your shipment or filing. This article is general information, not advice on your facts.
Talk to CA Karan Shah about your export benefits
Tell us what you import and export. We will tell you which schemes apply, what each is worth on your numbers, and what it takes to run them. No obligation.
Written by CA Karan Shah
Founder of KC Shah & Associates, Chartered Accountants, Andheri East, Mumbai (ICAI Membership No. 190724). Advises manufacturers and exporters on MOOWR, Advance Authorisation, RoDTEP and drawback, and GST export refunds, alongside GST compliance and outsourced accounting in Tally and Zoho Books.