Saloni Kumari | Jun 14, 2025 |
AAR Denies ITC of GST Paid on Import of Sample Drug
The applicant, M/s. PPD Pharmaceutical Development India Private Limited is a company registered under the Companies Act, 1956 and is engaged in monitoring and managing the clinical trial process undertaken by hospitals/clinics (“Sites”) and Doctors (“Investigators”) in India. The Applicant has obtained registration under the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “the CGST Act”). The registered address of the business is 101 A Wing, Fulcrum, Hiranandani Business Park, 1st, Sahar Road, Andheri (East), Maharashtra, Mumbai Suburban, 400099.
The applicant is affiliated with PPD group, which is a Clinical Research Organisation that offers clinical research services to pharmaceutical and biotech companies (“Sponsors”) on an international basis. These services include consultancy, project management, data collection and specialist ancillary services. The PPD group companies in the US or UK (“PPD Global”) are approached by the Sponsor who wishes to conduct a clinical trial study for a novel drug.
The current application has been filed under Section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as “the CGST Act and MGST Act” respectively] by M/s. PPD Pharmaceutical Development India Private Limited. The applicant seeking the advance ruling asks the following questions:
“Question 1: Whether the Applicant is entitled to take credit of Integrated Goods and Services Tax (“IGST“) paid by the Applicant under section 3(7) of the Customs Tariff Act, 1975 r/w section 5(1) of the Integrated Goods and Services Tax Act, 2017 (“the IGST Act“) while importing the sample drugs, in terms of section 16(1) of the CGST Act?
Question 2: Whether the Applicant is entitled to take credit of IGST paid by the “logistics service provider” [under DDP (Delivered Duty Paid) model of shipment] under section 3(7) of the Customs Tariff Act, 1975 r/w section 5(1) of the IGST Act while importing the sample drugs, in terms of section 16(1) of the CGST Act, where the Applicant is the Importer on Record?
Question 3: Whether the Applicant is entitled to take credit of Central Goods and Services Tax (“CGST“) paid by the Applicant under section 7 r/w section 9 of the CGST Act for the services of Customs House Agent received by the Applicant, in terms of section 16(1) of the CGST Act?”
In accordance with the Maharashtra Authority for Advance Ruling:
Ans. 1: No, the Applicant is not entitled to take credit of Integrated Goods and Services Tax (“IGST“) paid by the Applicant under section 3(7) of the Customs Tariff Act, 1975 r/w section 5(1) of the Integrated Goods and Services Tax Act, 2017 (“the IGST Act“) while importing the sample drugs, in terms of section 16(1) of the CGST Act.
Ans. 2: No, Applicant is not entitled to take credit of IGST paid by the “logistics service provider” [under DDP (Delivered Duty Paid) model of shipment] under section 3(7) of the Customs Tariff Act, 1975 r/w section 5(1) of the IGST Act while importing the sample drugs, in terms of section 16(1) of the CGST Act, where the Applicant is the Importer on Record.
Ans. 3: No, the Applicant is not entitled to take credit of Central Goods and Services Tax (“CGST“) paid by the Applicant under section 7 r/w section 9 of the CGST Act for the services of Customs House Agent received by the Applicant, in terms of section 16(1) of the CGST Act.
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