MOOWR Scheme: Boosting Export Competitiveness through Duty Savings
Table of Contents
Overview of MOOWR Scheme
The Merchant Exporter Scheme (Replacement of Duty Free Import Authorization Scheme – DFIA) – popularly known as MOOWR (Duty Credit Scrip) Scheme is a significant export promotion initiative aimed at incentivizing exporters in India. It allows exporters who do not manufacture the exported goods to import inputs without payment of customs duties restricted under the standard Advance Authorization scheme.
Initially introduced as the DFIA scheme, it evolved into the MEIS (Merchandise Exports from India Scheme), and currently MOOWR is available in line with changing policies to further promote exports across diverse sectors.
The MOOWR scheme is governed by the Foreign Trade Policy (FTP) and its detailed operational guidelines are provided in the Handbook of Procedures (HBP) issued by the Directorate General of Foreign Trade (DGFT). It is designed to bridge the duty disadvantages faced by exporters by providing duty credit scrips which can be used to pay customs duties or transferred/sold in the market.
The Ministry of Commerce and Industry, along with DGFT, administers this scheme, which plays a pivotal role in enhancing the price competitiveness of Indian exports globally.
Who Needs the MOOWR Scheme?
- Merchant exporters who buy finished goods from manufacturers and export them without undergoing any further manufacturing or processing.
- Trading houses engaged in export, where product transformation is limited or absent.
- Exporters dealing in sectors covered under the scheme as notified in FTP.
- Startups and SMEs that prefer a trading role rather than manufacturing.
- Exporters aiming to reduce logistics and capital costs by leveraging duty credit scrip benefits.
- Entities who want flexibility in sourcing inputs or finished goods from domestic or international markets.
- Businesses seeking to enhance their export turnover by utilizing available duty benefits.
MOOWR is essential for those who contribute to exports but do not possess manufacturing facilities.
Key Benefits of MOOWR Scheme
- Duty Credit Scrips: Provides transferable duty credit vouchers equivalent to a percentage of FOB export value.
- Enhanced Competitiveness: Lowers input cost impact, enabling exporters to offer competitive pricing in global markets.
- Flexibility: Exporters can use scrips for payment of customs duties on import of inputs for exports or capital goods.
- Transferability: Scrips can be freely transferred/sold in the market, creating liquidity options.
- Improved Cash Flow: Enables access to funds via sale or usage of duty scrips without upfront cash outflow.
- Encourages Export Diversification: Available across a broad spectrum of notified products under FTP.
- Simplicity in Compliance: Streamlined application and validation process on DGFT’s online portal.
- Long Validity: Duty credit scrips are valid for a specified period (e.g., 18 months to 3 years), offering planning flexibility.
Procedure to Avail MOOWR Scheme
- Registration on DGFT Portal: Ensure your export organization is registered with DGFT and holds valid IEC.
- Export Performance: Make eligible exports as per the scheme guidelines.
- Online Application: File an application on the DGFT website providing export details, including shipping bills and product codes (HSN/SAC).
- Verification: DGFT verifies export documentation and eligibility criteria.
- Scrip Issuance: On successful validation, duty credit scrips are credited into the exporter’s electronic ledger on the DGFT portal.
- Utilization of Scrips: Exporters may use scrips to pay customs duty on imports or transfer/sell them.
- File Returns: Submit annual or periodic returns reflecting scrip utilization and export performance.
- Renewal and Amendments: Monitor and apply for scheme renewals as per FTP validity; notify any changes if applicable.
Documents Required for MOOWR Application
Shipping Bill Copies: Proof of export shipments linked to the claim.
IEC (Import Export Code): Valid registration details.
Export Invoice: Detailing consignment value and product description.
Bank Realization Certificate (BRC)/FIRC: Evidence of foreign exchange earned from exports.
Authorized Dealer’s Certificate: For export realization of service exporters.
DGFT Application Form: Filled and digitally signed online.
Cancelled Cheque/Bank Mandate Form: For e-payment or refund processes.
PAN Card and GST Registration Certificate: For business legitimacy and tax compliance.
Registration with Export Promotion Councils: If applicable.
Compliance and Monitoring
- Timely Filing: Submit claims as per DGFT stipulated timelines.
- Maintain Export Performance: Ensure consistency with declared export turnover.
- Utilization of Duty Scrips: Use scrips only against permitted customs duties and within validity.
- Record Keeping: Retain all export bills, documents, and bank realization evidence for audits.
- Renewal and Validity: Keep track of scheme renewals and validity of duty scrips.
- Respond to Queries: Address any DGFT inquiries promptly to avoid delays or penalties.
Why Choose Us for MOOWR Scheme Assistance?
- Expert Knowledge: In-depth understanding of MOOWR and other export incentive schemes.
- Comprehensive Support: From eligibility assessment, application filing, documentation to claim processing.
- Accurate Documentation: Ensuring error-free submissions help avoid rejections and delays.
- Timely Updates: Keeping clients informed on regulatory changes impacting MOOWR.
- Customized Solutions: Tailored services for SMEs, large exporters, and MSMEs.
- Cost-Effective: Transparent pricing with no hidden charges.
- Proven Track Record: Successful handling of hundreds of MOOWR applications for many clients.
Frequently Asked Questions (FAQs)
What is the MOOWR Scheme?
MOOWR (Merchandise Exports from India Scheme) offers duty credit scrips to exporters to boost competitiveness in global markets.
Who is eligible for MOOWR benefits?
Exporters of goods listed in the FTP, including merchant exporters and manufacturers.
How is the duty credit scrip calculated?
Typically as a percentage of FOB export value specified for each product in the FTP.
Can duty credit scrips be transferred or traded?
Yes, MOOWR scrips are freely transferable and can be used by other importers or exporters.
What documents are needed to claim MOOWR benefits?
Shipping bills, IEC, export invoices, bank realization certificates, and DGFT application.
What happens if export obligations are not met?
Recovery of duty, interest, and penalties along with cancellation of the authorization.
How to monitor MOOWR application status?
Through the DGFT online portal using the application or ARN number.