CBIC Clarifies IGCR and MOOWR Scheme Compatibility

“Indirect Tax I Indirect Tax Litigation I Customs & FTP I Central Licensing I Arbitration I Advisory”

Dated: 08.07.2025

CBIC Clarifies IGCR and MOOWR Scheme Compatibility

The Central Board of Indirect Taxes and Customs (CBIC) issued Circular No. 26/2024-Customs to clarify key issues regarding the applicability of concessional customs duty under IGCR Rules, 2022 when goods are imported under the MOOWR Scheme.

This blog provides a step-by-step breakdown of the clarifications, issues addressed, and compliance actions required by importers, manufacturers, and MOOWR units.

Understanding the Relevant Schemes

What is MOOWR?

MOOWR stands for Manufacture and Other Operations in Warehouse Regulations, 2019, notified under Section 65 of the Customs Act, 1962.
It allows duty deferment for capital goods and raw materials imported for manufacturing in bonded warehouses.

What is IGCR?

IGCR stands for Import of Goods at Concessional Rate of Duty Rules, 2022.
It permits eligible manufacturers to import goods at concessional customs duty rates, subject to end-use conditions and documentation.

Issues Raised

Two main queries were raised to CBIC:

Can MOOWR units simultaneously avail IGCR benefits?

Example Scenario: A warehousing unit uses imported goods under IGCR and MOOWR for manufacturing and then:
- Clears finished goods to Domestic Tariff Area (DTA),
- Supplies to SEZ units, or
- Transfers goods to another MOOWR unit.

Is IGCR benefit available to MOOWR units supplying intermediate goods for mobile phone manufacturing?

Example Scenario: A MOOWR unit imports mobile phone components, performs value addition, and supplies to a final manufacturer of mobile phones. Notification No. 57/2017-Customs mentions “for use in manufacture of cellular mobile phones”—raising doubt whether intermediate manufacturers are eligible.

CBIC’s Clarifications

Simultaneous Use of MOOWR and IGCR Is Permitted

Referencing FAQ No. 17 on MOOWR:

“A unit operating under Section 65 can avail any other benefit, if the scheme allows.”

Conclusion: A MOOWR unit may avail IGCR exemption and duty deferment under MOOWR together, subject to the conditions of both schemes.

Key Requirements:

Maintain compliance with IGCR Rules, including:
- Time limits for consumption,
- End-use conditions,
- Proper records and reports.
Simultaneously adhere to MOOWR requirements such as:
- Warehouse licensing,
- Bond execution,
- Transfer and accountal of goods.

IGCR Available for Intermediate Goods Supplied to Mobile Phone Manufacturers

The phrase “for use in manufacture of cellular mobile phones” does not require import by the final manufacturer only.
MOOWR units engaged in value addition and supplying to mobile phone assemblers qualify for IGCR benefit.

Supporting Reference:

CBIC Instruction No. 16/2024-Customs dated 25.06.2024 outlines:
- Transfer procedures between MOOWR units,
- Documentation standards,
- Accountal systems.

Compliance Conditions:

Intermediate manufacturer must:
- Add measurable value,
- Maintain traceability to the final product,
- Fulfill IGCR and MOOWR documentation norms.

Actionable Takeaways for Businesses

Stakeholder	Action Required
MOOWR Units	Review existing import processes. Identify goods that qualify for IGCR benefit. Maintain dual compliance with IGCR and MOOWR.
Customs Brokers	Align documentation, especially for IGCR declarations and transfer records under Instruction 16/2024.
Mobile Phone Component Suppliers	If operating under MOOWR, claim IGCR on eligible components even if final manufacturing is done elsewhere.
Trade Compliance Teams	Update SOPs to ensure correct classification, time-bound consumption, and bonded warehouse accountal.

How to Implement the Clarifications

For Simultaneous IGCR + MOOWR Benefit

Identify goods eligible under IGCR.
Declare intent to claim IGCR at the time of import.
Comply with:
- IGCR Rules: Rule 5, 6, 7 (intimation, consumption, and record maintenance).
- MOOWR Procedures: Licensing under Section 65, monthly return (ER-2), and inventory tracking.

For Intermediate Supply to Mobile Phone Manufacturers

Maintain:
- Bill of Entry (for import),
- Invoices and transfer challans (for value-added supply),
- End-use declarations by mobile phone manufacturers, if required.
Use IN-BOND and EX-BOND movement codes as per CBIC systems.

Conclusion

The CBIC Circular No. 26/2024-Customs simplifies and liberalizes the interpretation of duty concessions for MOOWR units operating in manufacturing supply chains. It enables:

Cost competitiveness for intermediate manufacturers;
Seamless duty concessions for DTA and SEZ supplies;
Harmonized use of multiple customs incentives.

These clarifications should encourage better utilization of the MOOWR Scheme and IGCR benefits—strengthening India’s position as a manufacturing and export hub for electronics and other sectors.

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Source: CBIC, Ministry of Finance, Govt. of India

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