For any Indian exporter or importer, licenses and regulatory approvals are the foundation on which duty benefits, cost savings, and legal safety are built. But a license is only as good as its closure. An open MOOWR account, a pending Advance License redemption, or an unanswered DGFT query can quietly turn into show-cause notices, bank guarantee encashments, and penalties years later.

At EximSCM, our Licensing & Regulatory Closures practice exists to solve exactly this problem — helping companies obtain the right licenses, use them correctly, and close them cleanly before they become liabilities. This guide walks through every major area we handle: MOOWR, IGCR, Advance & EPCG Licenses, and the closure of pending DGFT and Customs matters.

1. MOOWR Operations: Manufacturing Under Bond, Simplified

The Manufacturing and Other Operations in Warehouse Regulations (MOOWR), 2019 allow businesses to import capital goods and raw materials without upfront payment of customs duty, provided the goods are used inside a licensed bonded warehouse for manufacturing or other approved operations.

Why businesses choose MOOWR:

  • No upfront customs duty on capital goods or inputs, freeing up working capital
  • No export obligation, unlike Advance Authorisation or EPCG — MOOWR goods can be sold domestically or exported
  • No investment threshold or sunset clause, unlike SEZ or EOU schemes
  • Duty is paid only at the time of clearance of finished goods, and only on the imported input actually used

Where companies get stuck:

  • Getting the private bonded warehouse license under Section 65 of the Customs Act approved by the jurisdictional Commissionerate
  • Maintaining the mandatory digital records (Form B, B-17 bond, triple-duty bank guarantee) in the prescribed format
  • Correctly computing duty on removal, especially when scrap, by-products, or waste are generated
  • Periodic renewal and audit readiness for MOOWR units

We assist clients end-to-end — from feasibility study and license application, to process and SOP design, to ongoing compliance and audit support — so that the benefit of duty deferment doesn’t come with the risk of non-compliance.

2. IGCR Clearance & Benefits: Using Concessional Duty the Right Way

The Import of Goods at Concessional Rate of Duty (IGCR) Rules, 2022 allow manufacturers to import raw materials, parts, or capital goods at a reduced or nil rate of customs duty, subject to the condition that the goods are used for the specified manufacturing purpose.

Key benefits under IGCR:

  • Significant duty savings on inputs used for specified manufacture (electronics, machinery, textiles, and more)
  • A fully online, paperless procedure through the common portal, integrated with ICEGATE
  • Continuity certificate mechanism that removes the need for repeated job-work permissions
  • Flexibility to send goods for job work to third parties under intimation

Where the risk lies:

  • Filing accurate quarterly/half-yearly usage statements within the prescribed timelines
  • Reconciling actual consumption against the imported quantity and reporting any shortfall
  • Maintaining a continuity bond and renewing it before expiry
  • Responding to department queries on unutilized or short-utilized quantities

Our team helps clients set up the IGCR registration, design the internal consumption-tracking and reporting SOP, and handle clearance of pending IGCR obligations so duty-saving schemes don’t turn into duty-demand notices.

3. Advance & EPCG Licenses: Getting the Export Obligation Discharged

The Advance Authorisation Scheme allows duty-free import of inputs physically incorporated in an export product, while the Export Promotion Capital Goods (EPCG) Scheme allows duty-free (or concessional) import of capital goods, both subject to a corresponding Export Obligation (EO).

These are among the most valuable duty benefit licenses issued by the DGFT — but they are also the most common source of long-pending compliance issues because the export obligation must be proven, not just fulfilled.

Where companies typically face challenges:

  • Filing Export Obligation Discharge Certificate (EODC) applications with correct shipping bill mapping
  • Handling shortfall in export obligation and the resulting duty + interest computation
  • Getting bank guarantee/bond redemption released after EODC issuance
  • Correcting mismatches between the license, invoice, and shipping bill descriptions
  • Applying for EO extension or clubbing of multiple licenses

We support clients through the complete lifecycle — license application, EO monitoring, EODC filing, and final bond/BG cancellation — so that duty-free imports don’t leave an open liability on the books.

4. Closure of Old Licenses: Cleaning Up Legacy Exposure

Many companies carry years-old, unredeemed Advance Authorisations, EPCG licenses, or MOOWR/IGCR obligations on their books — often inherited through mergers, leadership changes, or simple lack of follow-up. These legacy files carry real financial risk: unredeemed bank guarantees, interest accrual, and potential penalty proceedings.

Our closure of old licenses service focuses on:

  • Auditing all open licenses across DGFT and Customs records
  • Reconstructing missing shipping bill, BRC (Bank Realisation Certificate), and BOE (Bill of Entry) data
  • Filing for EODC, redemption, or regularisation of long-pending cases
  • Negotiating settlement of duty and interest where full compliance is not possible
  • Releasing bank guarantees and bonds tied to closed licenses

This is often the single highest-impact exercise for companies that haven’t reviewed their license portfolio in several years.

5. Closure of DGFT Queries: Responding Before Deadlines Expire

The Directorate General of Foreign Trade (DGFT) regularly raises queries on IEC updates, Authorisation applications, EODC requests, and scheme benefit claims through the DGFT portal. Missed or poorly drafted responses lead to application rejection or escalation.

We help clients with:

  • Drafting technically accurate, timely responses to DGFT portal queries
  • Coordinating with Regional Authority (RA) offices for case-specific clarifications
  • Following up on IEC modification, Authorisation amendment, and policy relaxation requests
  • Escalation support for genuine hardship cases under Policy Relaxation Committee (PRC) provisions

6. Closure of Customs Queries: Resolving Assessment & Post-Clearance Issues

Customs queries can arise at any stage — during Bill of Entry assessment, post-clearance audit, or SVB (Special Valuation Branch) proceedings. Left unanswered, these convert into show-cause notices and demand orders.

Our support covers:

  • Responding to assessment and classification queries raised by Customs
  • Handling post-clearance audit (PCA) and Risk Management System (RMS) queries
  • Coordinating SVB investigation and transfer pricing related-party import queries
  • Preparing replies to show-cause notices with supporting documentation

Frequently Asked Questions

1. What is the difference between MOOWR and IGCR? MOOWR allows duty-deferred manufacturing inside a bonded warehouse with no export obligation, while IGCR allows a concessional or nil duty rate on inputs used for a specified manufacturing purpose, without the bonded warehouse requirement.

2. What happens if Export Obligation under Advance Authorisation or EPCG is not met? The importer becomes liable to pay the customs duty saved, along with applicable interest, on the shortfall quantity — unless an extension, clubbing, or regularisation is obtained from DGFT.

3. Can old, unredeemed licenses still be closed? Yes. Even multi-year-old Advance Authorisation, EPCG, or IGCR cases can usually be regularised, redeemed, or settled with the right documentation and representation before the authorities.

4. Why is Certificate of Origin scrutiny important under FTAs? Under CAROTAR 2020, Customs can seek additional information to verify origin claims. Incorrect or unsupported COO claims can lead to denial of preferential duty and penalty proceedings.