Customs CBIC

Duty Free Import of Capital Goods in India- Analysis of Different Options

13/07/2023
BORN IN INDIA I SERVED FROM INDIA

Dated: 13.07.23

Import of Capital Goods without Import Duty in India- A Comparative Perspective vis a vis MOOWR Scheme

Options available for Manufacturers in India:

  1. To Import Capital Gods under EPCG Scheme with an Export Obligation of 6 times of duty saved amount in 6 Years with up to 75% EO completed in the first 4 years itself
  1. Import of Certain Capital goods or raw materials for production under the IGCR Rules at concessional rate of duty, shipment wise registration of request under IGCR Rules
  1. Project Import benefits- Project Import Regulations Key Changes:
  1. Projects registered till 30th September 2022 under project imports will continue to get lower rates of duty till 30th September 2023 only
  2. New projects registered after 30th September 2022 under project imports will attract 7.5% BCD rate
  3. With effect from 30th September 2023, all projects registered under project imports will attract 7.5% BCD rate.
  4. Refer to be drawn from Letter issued vide File No D.O.F. No. 334/01/2022-TRU dtd 01st February 2022. The said Notification no 50/2017 at Sl. No 597 (ii) has now been amended from 2.5% to 7.5% wef 30/09/2022. Pls refer to Notfn no 02/2022-Customs Dtd 01st Feb 2022 at Sl. No 155 on Page no 18 of the PDF file.  
  1. Manufacture and Other Operations in Warehouse Regulations, 2019, (MOOWR, 2019) – SECTION 65 & SECTION 58 OF THE INDIAN CUSTOMS ACT. 1962

This program is based upon Section 65 of the Customs Act, 1962, which enables conduct of manufacture and other operations in a Customs bonded warehouse.

As part of this program, a unit can import goods (both inputs and capital goods) under customs duty deferment with no interest liability. There is no investment threshold or export obligation, and the duties are fully remitted if the goods resulting from such operations are exported. Import duty is payable only if the resulting goods or imported goods are cleared in the domestic market (ex-bonding).

Please see the video presentation of the slide for key insights into the MOOWR scheme:

 

Source: CBIC, Min of Finance, Govt of India

 

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Disclaimer:

The views expressed in the update are strictly personal, based on our understanding of the underlying law. We are not responsible for any injury, loss or cost arising to any person who refers this update and acts or refrains from any act accordingly. We would suggest that a detailed legal advice must be sought before relying on this update.

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