Government of India Ministry of Finance (Department of Revenue)
Notification No. 04/2019- Integrated Tax
New Delhi, the 30th September, 2019
G.S.R......(E).- In exercise of the powers conferred by sub-section (13) of section 13 of
the Integrated Goods and Services Tax Act, 2017 (13 of 2017), the Central Government, on
being satisfied that it is necessary in order to prevent double taxation or non-taxation of the
supply of a service, or for the uniform application of rules, on the recommendations of the
Council, hereby notifies following description of services or circumstances as specified in
Column (2) of the Table A, in which the place of supply shall be the place of effective use and
enjoyment of a service as specified in the corresponding entry in Column (3), namely:-
Table A
Sl. No. |
Description of services or circumstances |
Place of Supply |
(1) |
(2) |
(3) |
1 |
Supply of research and development services related to
pharmaceutical sector as specified in Column (2) and (3) from Sl.
No. 1 to 10 in the Table B by a person located in taxable
territory to a person located in the non-taxable territory. |
The place of supply of services shall be the location of the
recipient of services subject to fulfillment of the following
conditions:- (i) Supply of services from the taxable territory are
provided as per a contract between the service provider located in
taxable territory and service recipient located in non-taxable
territory. (ii) Such supply of services fulfills all other
conditions in the definition of export of services, except sub-
clause (iii) provided at clause (6) of Section 2 of Integrated Goods
and Services Tax Act, 2017 (13 of 2017). |
Table B
Sl. No. |
Nature of Supply |
General Description of Supply |
(1) |
(2) |
(3) |
1 |
Integrated discovery and development |
This process involves discovery and development of
molecules by pharmaceutical sector for medicinal use. The steps
include designing of compound, evaluation of the drug metabolism,
biological activity, manufacture of target compounds, stability study
and long-term toxicology impact |
2 |
Integrated development |
3 |
Evaluation of the efficacy of new chemical/ biological entities
in animal models of disease |
This is in vivo research (i.e. within the animal) and involves
development of customized animal model diseases and administration
of novel chemical in doses to animals to evaluate the gene and
protein expression in response to disease. In nutshell, this
process tries to discover if a novel chemical entity that can reduce
or modify the severity of diseases. The novel chemical is supplied
by the service recipient located in non-taxable territory. |
4 |
Evaluation of biological activity of novel chemical/ biological
entities in in-vitro assays |
This is in vitro research (i.e. outside the animal). An assay is
first developed and then the novel chemical is supplied by the
service recipient located in non-taxable territory and is
evaluated in the assay under optimized conditions. |
5 |
Drug metabolism and pharmacokinetics of new chemical entities |
This process involves investigation whether a new compound
synthesized by supplier can be developed as new drug to treat
human diseases in respect of solubility, stability in body fluids,
stability in liver tissue and its toxic effect on body tissues.
Promising compounds are further evaluated in animal experiments using
rat and mice. |
6 |
Safety Assessment/ Toxicology |
Safety assessment involves evaluation of new chemical entities in
laboratory research animal models to support filing of
investigational new drug and new drug application. Toxicology team
analyses the potential toxicity of a drug to enable fast and
effective drug development. |
7 |
Stability |
Studies Stability studies are conducted to support formulation,
development, safety and efficacy of a new drug. It is also done to
ascertain the quality and shelf life of the drug in their intended
packaging configuration. |
8 |
Bio-equivalence and Bioavailability Studies |
Bio-equivalence is a term in pharmacokinetics used to assess the
expected in vivo biological equivalence of two proprietary
preparations of a drug. If two products are said to be bioequivalent
it means that they would be expected to be, for all intents and
purposes, the same. Bioavailability is a measurement of the rate and
extent to which a therapeutically active chemical is absorbed from a
drug product into the systemic circulation and becomes available
at the site of action. |
9 |
Clinical trials |
The drugs that are developed for human consumption would undergo
human testing to confirm its utility and safety before being
registered for marketing. The clinical trials help in collection of
information related to drugs profile in human body such as
absorption, distribution, metabolism, excretion and interaction. It
allows choice of safe dosage. |
10 |
Bio analytical studies |
Bio analysis is a sub-discipline of analytical chemistry covering
the quantitative measurement of drugs and their metabolites,
and biological molecules in unnatural locations or concentrations and
macromolecules, proteins, DNA, large molecule drugs and metabolites
in biological systems. |
2. This notification shall come into force on the 1st day of October, 2019.
[F. No.354/136/2019 -TRU]
(Ruchi Bisht) Under Secretary to the
Government of India
|