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Outbyte Driver Updater FREEScan for outdated or missing drivers - takes under a minuteDriver Scan →Outbyte PC Repair FREEClear out junk files and repair common Windows errorsFree Scan →An Indian clinical-trial service qualifies as an export of services under GST only if it meets all five conditions in section 2(6) of the IGST Act. A foreign sponsor or payment from abroad is not enough. The place of supply is often the central issue: the result depends on the service being supplied, the trial goods and their custody, the provider’s role, the recipient’s identity, the payment arrangements and the law applicable during the contract period. Read section 2(6) and the related place-of-supply rules in the IGST Act.
Start with the five statutory conditions
Section 2(6) of the Integrated Goods and Services Tax Act, 2017 (IGST Act) defines an export of services through five cumulative conditions. Assess each one against the actual transaction:
- Supplier: the supplier of the service is located in India.
- Recipient: the recipient is located outside India.
- Place of supply: the place of supply is outside India.
- Payment: payment is received in convertible foreign exchange or in Indian rupees wherever permitted by the Reserve Bank of India.
- Distinct establishments: the supplier and recipient are not merely establishments of a distinct person under the statutory explanation.
If any one condition fails, the supply does not meet the Act’s definition of an export of services. The IGST Act is the primary source for the definition and related rules.
Identify the supply and the actual recipient
Do not classify a whole clinical-trial relationship by its label alone. A CRO may perform research work, manage trial sites, provide support, or arrange services supplied by other parties. Those activities may need separate analysis if the contracts and performance show materially different deliverables or recipients.
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Map the parties and deliverables
Review the master services agreement, work orders, statements of work and invoices. For each material service, identify who contracts to supply it, who is legally and commercially receiving it, who performs it, and who is responsible for the promised result. Include trial sites, investigators, affiliates and subcontractors where they take part in performance. The official Cliantha Research ruling and the Asiatic Clinical Research record concern particular arrangements; neither should be treated as a ruling on every CRO contract.
Check the recipient’s location and corporate relationship
A foreign entity named in a contract is not automatically the recipient for every service. Check which entity receives and uses each deliverable and whether another entity is the real contracting or receiving party. If the recipient is a foreign group company, separately test the distinct-establishment condition rather than assuming that every affiliate transaction is disqualified. CBIC Circular 161/17/2021-GST addresses supplies by an Indian subsidiary or group company to a foreign group company; apply it to the actual corporate structure and transaction. CBIC Circular 161/17/2021-GST.
Why place of supply can decide the result
For cross-border services, section 13 of the IGST Act generally places the supply at the recipient’s location unless a more specific rule applies. Two questions deserve particular attention in a clinical-trial arrangement: whether the service concerns goods physically made available to the provider, and whether the provider is an intermediary.
Trial products and other goods
Section 13(3)(a) addresses services supplied in respect of goods that must be physically made available by the recipient to the supplier, or to a person acting on the supplier’s behalf, to provide the service. Clinical trials may involve investigational products at sites in India. Establish who supplies the product, who holds or handles it, where it is during the work, and how the service depends on its availability. The presence of a drug in India, by itself, should not be treated as conclusive: determine whether the statutory rule applies to the particular service and whether an applicable exception or notification changes the analysis. See section 13 of the IGST Act.
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Research on the provider’s own account or intermediary activity
The Act’s intermediary definition covers a broker, agent or other person who arranges or facilitates a supply between two or more persons, while excluding a person who supplies the relevant goods or services on its own account. A CRO responsible for a research deliverable is analytically different from a provider that merely arranges a sponsor’s supply with another provider. Examine the contract, actual responsibilities, and which service is the principal or main supply. CBIC Circular 107/26/2019-GST says intermediary status depends on the facts and circumstances. If the intermediary place-of-supply rule in section 13(8)(b) applies, the place of supply is the supplier’s location; for an Indian supplier, that may prevent the place-of-supply condition for export from being met. CBIC Circular 107/26/2019-GST; CBIC sectoral FAQ.
What the Cliantha ruling does—and does not—establish
In its decision dated 4 May 2019, the Maharashtra Authority for Advance Ruling in Cliantha Research Limited concluded, on the applicant’s facts, that clinical trials and support services performed at the applicant’s facilities in India had a place of supply in India and did not qualify as export services. The ruling is an important example of how the place-of-supply issue has been decided in a particular clinical-research arrangement. It is not a universal rule that every Indian CRO’s services to a foreign sponsor fail the export test. Cliantha Research Limited order; GST Council AAR case index.
Check the later pharmaceutical R&D development for the relevant period
A 2025 Karnataka High Court case record in Iprocess Clinical Marketing concerns clinical trials, sections 13(2) and 13(3)(a), and Notification No. 04/2019-Integrated Tax. The cited judgment record includes an argument about the notification’s scope and retrospective effect; that argument alone does not establish the court’s final holding or the notification’s full effect. Do not rely on the record to claim that all clinical-trial services are exports, or that all are non-exports. For a contract spanning a notification or judgment period, verify the official notification, the full judgment and their effective dates before reaching a conclusion. Iprocess Clinical Marketing judgment record.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Check how consideration is paid
Trace the consideration against the contract and the statutory payment condition. Record what the foreign recipient owes, what the Indian supplier invoices, what is actually received, and whether payments meet the applicable statutory requirements. Do not infer compliance merely from a foreign-currency invoice or a payment originating abroad.
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Use a transaction file to reach and support the conclusion
Before deciding how to treat a clinical-trial service, assemble records that let a reviewer follow the supply from contract to performance and payment:
- Master services agreements, work orders, statements of work and amendments, including the relevant contract dates.
- Legal identities and locations of the supplier, contracting party, service recipient, sponsor, group entities and any entity using the deliverable.
- A description of each service and deliverable, the party responsible for it, and the role of the CRO, sites, investigators and subcontractors.
- Records showing who supplied the investigational product or other goods, where they were held or used, and who had custody during the relevant work.
- Invoices, payment records, bank documentation and any direct payments by the foreign recipient to overseas subcontractors.
- The notifications and legal decisions applicable during the period being assessed, including verified official texts where a later development may affect the result.
Then document the five-condition test and the reasoning for the applicable place-of-supply rule for each material service. If the GST treatment affects tax charged, a letter of undertaking (LUT), or a refund position, obtain transaction-specific Indian GST advice. Refund calculations and filing requirements should be checked against the current rules; CBIC publishes the GST refund rules.
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