In re Lupin Limited (CAAR Mumbai)
The Customs Authority for Advance Rulings (CAAR), Mumbai, considered an application seeking clarification on the applicability of concessional customs duty under Notification No. 45/2025-Customs for goods imported by a pharmaceutical company’s DSIR-recognized Research and Development (R&D) units. The applicant sought rulings on three issues: whether its DSIR-recognized R&D units qualified as eligible research institutions; whether R&D goods imported for activities before manufacture of an Exhibit Batch qualified for the concession; and whether goods imported for manufacture of an Exhibit Batch were also eligible.
The applicant explained that it operates DSIR-recognized in-house R&D facilities at Pune and Aurangabad engaged in pharmaceutical research. It described its multi-stage R&D process, beginning with project initiation, obtaining test and import licences where required, formulation development, analytical testing, stability studies, bioequivalence studies, and finally manufacture of an Exhibit Batch under technical supervision before seeking regulatory approval. According to the applicant, the imported materials—including Reference Listed Drugs (RLDs), Active Pharmaceutical Ingredients (APIs), impurities, chemicals, reagents, enzyme powders, packaging materials, vials, canisters, pre-filled syringes and similar goods—are used exclusively for research and are substantially or wholly consumed during experimentation, testing and analytical processes.
The applicant submitted that Notification No. 45/2025-Customs grants concessional customs duty to DSIR-recognized research institutions importing specified goods, including consumables, subject to prescribed conditions such as certification by the Head of the institution and exclusive research use. It argued that its R&D units fulfilled these conditions and that the imported materials should qualify as consumables because they are exhausted during research. It also contended that manufacture of the Exhibit Batch is an inseparable extension of the R&D process, undertaken solely for validation, testing and regulatory purposes without any commercial sale, and therefore imports for that stage should also qualify for the concession.
