CBIC Clarifies Restrictions On Warehousing Goods For Solar Power Generation Projects Under MOOWR Scheme

The Central Board of Indirect Taxes and Customs (CBIC) issued Notification No. 86/2024-Customs on December 16, 2024, clarifying restrictions on certain goods in warehouses. According to the notification, goods imported for solar power generation projects that supply electricity cannot be kept in warehouses. This restriction applies specifically when electricity is generated as part of manufacturing processes involving warehoused goods under Section 65 of the Customs Act, 1962. The notification will be effective from December 17, 2024.

The Manufacturing and Other Operations in Warehouse (MOOWR) scheme, first introduced in 1996 and revamped in 2019, allows manufacturers to import raw materials and capital goods without paying customs duty. Under the scheme, manufacturers benefit from streamlined processes, digitalized record-keeping, and the elimination of interest liabilities. It provides flexibility, as units can be established without geographical restrictions, and offers quick approval through a simplified application process, including antecedent checks, site verification, and bond execution with insurance.

The notification clarifies that the MOOWR scheme does not intend to exclude solar power generation projects from the permissions granted under Section 65 of the Customs Act. Instead, the focus is on ensuring compliance with the regulatory framework while facilitating manufacturing operations in warehouses.