VIEW: MOOWR 2019—A stepping stone to move seamlessly from local to global!

Narasapura, some 50 km away from Bengaluru in Kolar district and identified as one of the 16 national investment and manufacturing zone (NIMZs) districts in the country under the National Manufacturing Policy, has been witnessing a hectic activity of late. The trigger being the revised warehousing regulations (Manufacture and other Operations in Warehouse Regulations 2019—MOOWR 2019) of the Central Board of Indirect Taxes and Customs (CBIC).

In terms of the warehousing provisions, which are simple and easy to comply, capital goods and raw materials can be imported without payment of duty for manufacturing and other operations, to a bonded warehouse facility. The duty is deferred—and where the imported inputs are used for the manufacture of goods exported, the duty, namely the basic customs duty and IGST is exempted and the GST, zero-rated. A single point of approval, common application form, unlimited period of retaining the warehoused goods, facility of importing capital goods needed for the manufacture also duty-free, no geographical restriction as to where to open the manufacturing warehouse, make it a more attractive proposition than other extant schemes.

The bonded warehousing manufacturing facility also falls nicely within the remit of the Prime Minister’s alliterative call ‘be vocal for local’ which has grabbed attention—social media is agog with excitement and nationalistic fervor and calls for boycotting all things Chinese. While the call for buying local is necessary, we should avoid the pitfall of slumping into a protectionist mode; globalisation, is here to stay. The warehousing facility permits India to be part of the global value chain, one of the major arguments for pursuing free trade agreements, without its pitfalls. Goods apart from being permitted to be imported duty-free for further processing or manufacture for export can also be cleared for domestic consumption-on payment of all appropriate duties, thus ensuring Indian manufacturers have the necessary protection. And being located within the country it provides employment opportunities.