In re Sun Pharmaceutical Industries Limited (CAAR Mumbai)
Summary: Customs Authority for Advance Rulings, Mumbai held that bulk drugs/Active Pharmaceutical Ingredients (APIs) proposed to be imported by Sun Pharmaceutical Industries Limited are eligible for concessional IGST at 5% under Sl. No. 226 of Schedule I to Notification No. 9/2025-Integrated Tax (Rate) dated 17.09.2025, provided the particular bulk drug/API is not covered by the exclusion specified in Sl. No. 113 of Notification No. 10/2025-Integrated Tax (Rate) dated 17.09.2025.
The applicant, a pharmaceutical manufacturer, imported bulk drugs classifiable under Chapters 28 or 29 for manufacture of pharmaceutical formulations, as well as for testing, clinical trials, bioavailability and bioequivalence studies. It contended that although the notification did not define “drugs”, the expression “All Drugs and medicines” in Sl. No. 226 was broad enough to cover bulk drugs/APIs.
The Authority examined the definition of “drug” under Section 3(b) of the Drugs and Cosmetics Act, 1940, which includes all medicines and substances intended for use in diagnosis, treatment, mitigation or prevention of disease and all substances intended for use as components of a drug. It also considered the definition of “bulk drug” under the Drugs (Prices Control) Order, 2013, the statutory licensing framework governing import of bulk drugs and APIs, and definitions concerning bioavailability, bioequivalence and clinical trials.
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