Question:

We are Manufacturing company and planning to establish new unit, we will be manufacturing goods for Exports 65-70% and rest for domestic market. After comparing various schemes and alternatives like EPCG, Advance Authorization, EOU, SEZ and finally zero down on MOOWAR. Can we avail IGCR and MOOWAR both simultaneously? 

Solution: 

That's an excellent question. If you had asked me last week, my response would have been a resounding yes. However, at that time, there was no formal clarification from the CBIC. Fortunately, CBIC has now issued Circular No. 26/2024-Customs dated 21.11.2024, which provides clear guidance on the applicability of concessional duty under the IGCR Rules, 2022, particularly concerning MOOWR. This clarification has brought much-needed transparency to the matter.

Many customs duty exemptions and concessions are subject to end use conditions. IGCR is one of such scheme. In order to ensure that goods imported are used for their intended purpose, the importers need to comply with the procedure laid down in the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 (‘IGCR Rules’). IGCR scheme has undergone several changes. 

Even though FAQ published by CBIC on MOOWAR was having mention as follows 

“The eligibility to export benefits under FTP or IGCR would depend upon the respective scheme. If the scheme allows, units operating under Section 65 has no impact on the eligibility. In otherwords, a unit operating under Section 65 can avail any other benefit, if the scheme allows.”

Industry and manufactures were worried about uncertainty and possible disputes at later stage as both MOOWAR and IGCR schemes are covered in different regulations. This resulted in Industry making several representations to bring clarity. 

CBIC has now issued Circular No. 26/2024-Customs dated 21.11.2024,giving clarification  that a MOOWR unit can avail any benefit so long as it is allowed in the scheme itself, it was clarified that the simultaneous benefit of exemption requiring compliance with IGCR 2022 along with duty deferment under MOOWR can be availed.  In such cases compliances and conditions as prescribed in the IGCR 2022 and MOOWAR should be followed, including the notification in terms of timelines, etc.

Notification also clarified simultaneous use of IGCR and MOOWAR for intermediate manufacturers is permitted when supplies are made to another unit for final manufacture of the specified finished goods. 

Based on this clarification, I am confident that the MOOWR scheme has become significantly more appealing.