A cosmetics manufacturer may import thousands or millions of bottles, jars, pumps, caps, droppers, tubes, applicators, cartons and other packaging components before a single finished product is dispatched from the factory. Paying customs duties at the import stage can therefore lock significant working capital into inventory months before revenue is realised.
The MOOWR Scheme for cosmetics manufacturers can address this problem where the business establishes or converts its facility into an eligible customs bonded manufacturing operation. Under the framework, imported inputs and capital goods can enter the bonded facility without immediate payment of applicable import duties, subject to the Customs Act and the MOOWR requirements.
For a cosmetics business, however, the important question is not simply whether MOOWR is available. The real question is whether the company’s packaging imports, manufacturing process and domestic-versus-export sales model make MOOWR commercially worthwhile.
Section 65 of the Customs Act allows manufacturing or other permitted operations to be undertaken in a warehouse with the permission of the Principal Commissioner or Commissioner of Customs. A MOOWR facility must also operate as the appropriate private bonded warehouse under Section 58.
For a cosmetics manufacturer, imported materials could include items such as:
| Imported item | Typical role in cosmetics manufacturing | MOOWR relevance |
| Glass or plastic bottles | Primary packaging | Can form part of the imported input inventory used in manufacturing/packing |
| Jars and tubes | Primary packaging | Potential imported input |
| Pumps, dispensers and droppers | Packaging component | Potential imported input |
| Caps and closures | Packaging component | Potential imported input |
| Applicators and brushes | Product/packaging component | Assess according to finished-product configuration |
| Labels and cartons | Secondary packaging | May form part of approved packaging/other operations |
| Filling and sealing machines | Capital equipment | Can be evaluated as imported capital goods |
| Labelling/packing lines | Capital equipment | Can be evaluated under the bonded manufacturing facility |
The actual goods and operations should be accurately declared in the MOOWR application and reflected in the unit’s Customs records rather than assuming every imported packaging SKU will automatically receive the same treatment.
Consider an Indian skincare manufacturer importing premium airless bottles, pumps and caps for a serum manufactured at its Indian plant.
Without a bonded manufacturing model, applicable import duties are generally dealt with at the import stage.
Under MOOWR, eligible imported inputs can be warehoused and subsequently used in the approved manufacturing or packaging process while the applicable import duty remains deferred in accordance with the scheme.
This can significantly change the company’s working-capital cycle even though MOOWR should not be described simply as a blanket “customs duty exemption”.
This is one of the most important points for cosmetics manufacturers.
MOOWR does not require the manufacturer to export all of its finished products. Government guidance confirms that eligibility does not depend on whether the finished goods will ultimately be exported or sold in the domestic market, and there is no quantitative restriction requiring a specified proportion of exports.
Where resultant goods are removed from the bonded warehouse for home consumption, Regulation 14 requires the relevant bill of entry for home consumption for the warehoused goods contained in those resultant goods and payment of the applicable import duty and other amounts, where relevant.
In practical terms:
Imported packaging → Bonded factory → Cosmetic manufacturing/packing → Indian market
The duty is deferred, not automatically eliminated.
That distinction matters when preparing a MOOWR financial model.
The economics can be different for goods manufactured for export.
Official bonded-manufacturing guidance states that where finished goods are exported, duty on qualifying imported inputs used in the finished goods is remitted in accordance with the applicable Customs framework.
A cosmetics manufacturer with significant exports may therefore have a different MOOWR business case from a manufacturer selling primarily into India’s domestic market.
This is why the company should model the DTA/export split before deciding whether to establish a bonded manufacturing facility.
MOOWR can also be relevant where a cosmetics company imports expensive capital equipment such as:
Official guidance confirms that a Section 58/65 unit can warehouse imported capital goods with both BCD and IGST deferred until their eventual clearance for home consumption or export.
One important planning point is that a business should not assume depreciation will reduce the customs-duty basis simply because imported machinery has been used for several years. The official bonded-manufacturing FAQ states that depreciation is not available when such imported capital goods are subsequently cleared for home consumption from a Section 65 unit.
This should be built into the financial model before adopting MOOWR.
Before applying, classify the import flow.
| Situation | What to evaluate |
| High-value imported bottles, pumps and closures used in Indian manufacturing | Strong candidate for duty-deferment analysis |
| Large imported packaging inventory held for several months | Working-capital benefit may be significant |
| Majority of finished cosmetics exported | Examine export-linked duty treatment carefully |
| Majority of finished cosmetics sold in India | Model the duration of duty deferment rather than assuming permanent saving |
| Expensive imported filling/packaging machinery | Include capital-goods duty deferment in feasibility calculation |
| Mostly Indian packaging with very small imports | Administrative cost may outweigh working-capital benefit |
| Weak inventory traceability | Correct systems before moving to a bonded operation |
The correct feasibility study is therefore based on actual import and production data, not a generic statement that MOOWR “saves customs duty”.
Government guidance confirms that an existing Domestic Tariff Area manufacturer can apply. An applicant can obtain the Section 58 private bonded warehouse licence and Section 65 manufacturing/other-operations permission through the prescribed framework.
CBIC operationalised a dedicated online module on ICEGATE 2.0 for Section 65 MOOWR and MOOSWR permissions in November 2025, and ICEGATE provides the associated warehouse licensing/MOOWR workflow and manuals.
A cosmetics manufacturer should be ready to establish and document:
Circular 34/2019 also prescribes detailed recordkeeping for imported and domestic receipts, processing and removal of goods.
Before filing an application, management should be able to answer these questions:
Import profile: Can you identify the annual CIF value, HSN classification and applicable duty exposure of bottles, pumps, closures, labels and other imported packaging?
Production mapping: Can every significant imported packaging item be mapped to the finished cosmetic SKU or manufacturing/packing operation in which it is used?
Factory layout: Can the bonded area, production area, storage locations and entry/exit controls be clearly shown?
Inventory control: Can your ERP or stock-management system distinguish imported bonded goods, domestic goods, material consumption, wastage and finished-product clearance?
Sales model: Do you know the expected percentage of production going to the domestic market versus export?
Capital goods: Are filling, packaging or processing machines also being imported?
Compliance team: Is someone internally responsible for Customs records, monthly reporting and audit readiness?
If the answer to several of these questions is “no”, the business should complete a pre-application compliance review before filing.
MOOWR is an operating compliance system, not a one-time certificate.
The 2019 Regulations require detailed records relating to receipt, handling, storage and removal of warehoused goods. Records must also capture manufacturing or other operations undertaken in relation to those goods. The Regulations require prescribed records to be preserved and provide for monthly returns and Customs audit.
For cosmetics manufacturers handling hundreds of packaging SKUs, this can become the most important implementation issue.
A company may obtain the permission successfully but still create risk later if its Customs inventory does not reconcile with:
ERP and inventory mapping should therefore be designed before the first bonded shipment arrives.
A MOOWR approval deals with Customs warehousing and manufacturing operations. It does not replace product-specific licences.
Under the Cosmetics Rules, 2020, manufacture of cosmetics for sale or distribution is regulated through the State Licensing Authority, while import of cosmetics is regulated through the Central Licensing Authority.
Accordingly, a cosmetics manufacturer’s compliance map may separately include:
Customs: MOOWR / bonded warehouse requirements
Cosmetics regulation: Applicable manufacturing licence and Cosmetics Rules compliance
Packaging/environment: Plastic EPR obligations where applicable
Legal metrology: Applicable declarations for packaged commodities
Factory/environment: Applicable factory, pollution-control, fire and other site-specific approvals
These requirements should be assessed independently rather than assuming the MOOWR permission overrides other laws.
If the company introduces plastic packaging into the Indian market, its applicability under the Plastic Waste Management/EPR framework should also be reviewed separately. Green Permits already maintains dedicated guidance on Plastic EPR Registration.
For domestic clearances, the main benefit is generally duty deferment. The financial value therefore depends on how long cash remains available to the business before duty becomes payable.
“Packaging material” may cover hundreds of components. HSN classification, import value and production use should be mapped before filing.
Two cosmetics factories with identical imports may have very different MOOWR economics if one exports most of its output and the other sells entirely in India.
Imported filling, labelling and packaging machinery may materially change the financial case for adopting MOOWR.
Bonded inventory needs far stronger traceability than ordinary factory stores because Customs records must reconcile imports, processing and removal.
The scheme deserves detailed consideration where a business:
It may be less attractive where imports are very small, inventory turns extremely quickly or the organisation does not yet have the systems required to manage bonded inventory.
Do not begin with the question:
“How much duty can MOOWR save?”
Begin with:
Annual import value × applicable duty exposure × average deferment period × cost of capital
Then separately model:
That produces a more reliable investment decision than calculating customs duty alone.
Potentially yes. Government guidance confirms that eligibility is not dependent on exports and there is no quantitative restriction requiring a minimum export percentage. Import duty on inputs used in goods cleared into the domestic market must, however, be dealt with according to the home-consumption provisions.
Packaging materials used as imported inputs in approved manufacturing or other operations can be evaluated under the Section 65 model. Their classification, intended operation and resultant-product mapping should be included correctly in the application and records.
No. For domestic clearance, it should primarily be viewed as a duty-deferment mechanism, not a blanket exemption.
The bonded-manufacturing framework does not impose a quantitative export requirement merely as a condition for using Section 65.
CBIC operationalised the dedicated Section 65 MOOWR/MOOSWR online module on ICEGATE 2.0 in November 2025.
No. Cosmetics manufacturing remains governed separately under the Cosmetics Rules, 2020 and the applicable State Licensing Authority framework.
Before applying for MOOWR, a cosmetics manufacturer should first determine whether the projected working-capital benefit justifies operating a bonded manufacturing facility.
Green Permits can assist businesses with:
MOOWR eligibility assessment, import-basket review, Section 58 and Section 65 documentation, bonded-factory planning, application support and related compliance mapping.
For businesses importing plastic cosmetic packaging, the assessment can also identify whether a separate Plastic EPR review is required.
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