‘MOOWR is a duty deferment scheme’
Presently we import inputs under Advance Authorisation, manufacturing and supplying capital goods to our domestic customers against their invalidation letter for EPCG licence availed by them, which is deemed exports for us. We intend to convert our DTA unit to the MOOWR Scheme. Can we continue to supply capital goods manufactured from a MOOWR bonded warehouse against the customer’s EPCG Authorisation, availing the duty-free imported inputs?
The MOOWR scheme is essentially a duty deferment scheme. When you clear goods manufactured in a bonded warehouse, you have to pay duty on the inputs used in the manufacture of the goods -- the duty that you did not pay at the time you imported the inputs. There is no customs duty exemption for inputs used in the manufacture of capital goods in a bonded warehouse, even if they are supplied to an EPCG authorisation holder.
For a DTA unit, the FTP specifically allows advance authorisation to be issued against invalidation of an EPCG authorisation. Against that advance authorisation, inputs can be imported duty-free. There is a customs exemption notification for that.
So, what you can do is ask the EPCG authorisation holder to get his authorisation invalidated for direct imports and obtain an Advance Release Order (ARO) instead of an invalidation letter. When you clear the capital goods from the MOOWR premises, you can pay the duty on the inputs used in the manufacture of the capital goods and claim it as drawback on deemed exports supplies to EPCG authorisation holder (against ARO).
Under the EPCG scheme, Para 5.04 of HBP says that we have to submit the installation certificate within six months from date of completion of import, to the concerned RA. The RA may allow onetime extension of the period for producing the certificate by a maximum period of 12 months with a composition fee of ~5000. There are some relaxations for this provision. Can you please give me the details?
The DGFT had issued PN 37/2015-20 dated October 25, 2017, PN 1/2015-20 dated April 26, 2018, PN 78/2015-20 dated March 11, 2019, PN 55/2015-20 dated January 3, 2020 and PN 01/2015-20 dated April 7, 2021, condoning the delay in submission of the installation certificate. The last of these public notices allowed the submission of the installation certificate till March 31, 2021.
We are a small-scale unit, established in July 2019. We have total exports and deemed exports of over $3 million, after reckoning the double weightage and exports made during the current year. Can we get recognition as an Export House?
Yes, provided you have exports in at least two of the previous three years, and the current year.
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