In re Volvo Auto India Private Limited (CAAR Delhi)
Summary: The Customs Authority for Advance Rulings, Delhi considered an application filed by Mankind Pharma Limited concerning the applicable Integrated Goods and Services Tax rate on imported bulk drugs or Active Pharmaceutical Ingredients (APIs) classifiable under Chapters 28 or 29 of the Customs Tariff. The applicant stated that the APIs were used for manufacture of pharmaceutical formulations and, in certain cases, for testing, clinical research, clinical trials, bioavailability and bioequivalence studies. The applicant had been importing such goods under Forms 10, 11 and CT-17 issued under the statutory drug-control framework and had been discharging IGST at 18%, while contending that the applicable rate was 5%.
The Authority found the application valid under the Customs Act, 1962 and the CAAR Regulations, 2021 and proceeded to determine the rate of IGST. The questions before it were whether 5% IGST was leviable on imported bulk drugs/APIs under Serial No. 226 of Schedule I to Notification No. 9/2025-Integrated Tax (Rate) dated 17.09.2025 and, if not, what rate applied to bulk drugs/APIs falling under Chapters 28 or 29.
The Authority examined Section 3(7) of the Customs Tariff Act, 1975, under which imported articles are liable to integrated tax at the rate leviable under Section 5 of the IGST Act, 2017 on a like article supplied in India. It noted that the applicant did not dispute tariff classification under Chapters 28 or 29 and that the issue was confined to the applicable IGST rate.
