Simultaneous Availment of IGCR and MOOWR Benefits

Introduction The Central Board of Indirect Taxes & Customs (CBIC) issued Circular No. 26/2024-Customs dated 21.11.2024, providing detailed clarifications on the simultaneous availment of benefits under the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2022 (IGCR Rules) and the Manufacture and Other Operations in Warehouse Regulations (MOOWR) scheme. This circular addresses specific doubts and interpretations regarding the integration of these schemes.

Simultaneous Availment of IGCR and MOOWR Benefits

Eligibility for Dual Benefits Concerns were raised regarding the simultaneous use of the IGCR benefits for warehoused goods used in manufacturing under MOOWR, particularly in cases of clearances to the Domestic Tariff Area (DTA), Special Economic Zones (SEZs), or other MOOWR units.

CBIC reiterated the provisions outlined in Question 17 of the FAQs on MOOWR, which states that units operating under Section 65 of the Customs Act, 1962, are eligible to avail other scheme benefits, provided the respective scheme allows such usage.

Clarification The circular explicitly permits MOOWR units to avail of IGCR exemptions while benefiting from MOOWR duty deferment. This is conditional upon compliance with additional stipulations under the IGCR Rules, such as time limits and specific notifications, alongside the obligations under MOOWR regulations.

Applicability of IGCR for MOOWR Units Supplying Intermediate Goods

Interpretation of "For Use in Manufacture of Cellular Mobile Phones" The circular also addressed ambiguities regarding the concessional duty under Notification No. 57/2017-Customs, particularly for goods imported by MOOWR units for value addition and subsequent supply to manufacturers of cellular mobile phones.

Clarification CBIC clarified that the phrase "for use in manufacture of cellular mobile phones" refers to the intended use of the components in the manufacturing process. It does not restrict the import of such goods to the final manufacturer of cellular mobile phones. Thus, MOOWR units engaged in value addition to intermediate goods for supply to mobile phone manufacturers are eligible for concessional duty under the IGCR Rules, provided all prescribed conditions are met.

The guidance aligns with CBIC Instruction No. 16/2024-Customs, which elaborates on procedural compliance for MOOWR units, including documentation, transfer protocols, and periodic accountal.

Implementation and Further Action

The circular instructs field formations to issue suitable public notices to ensure the trade is well-informed. Stakeholders are advised to direct any challenges or ambiguities in implementing these provisions to the CBIC for resolution.

This clarification is expected to streamline operational efficiencies for businesses leveraging both MOOWR and IGCR schemes, thereby fostering ease of doing business under the customs framework.

At TaxTru, our dedicated team of professionals is committed to addressing your business's unique needs and ensuring compliance with all relevant tax regulations. From managing routine compliance matters to providing comprehensive solutions for litigation management, we are here to support your business at every step.

If you require assistance or have any indirect tax-related concerns, please do not hesitate to contact us at 9953357999 or via email at [email protected].