In re Torrent Pharmaceuticals Limited (CAAR Mumbai)
Summary: The Customs Authority for Advance Rulings (CAAR), Mumbai considered applications filed by Torrent Pharmaceuticals Limited seeking an advance ruling on the IGST applicable to imports of bulk drugs/Active Pharmaceutical Ingredients (APIs) under Notification No. 09/2025-Integrated Tax (Rate) dated 17.09.2025. The applicant, a pharmaceutical manufacturer, proposed to import bulk drugs/APIs classifiable principally under Chapters 28 or 29 of the Customs Tariff for use in manufacturing pharmaceutical formulations and, in certain cases, for testing, clinical trials, bioavailability or bioequivalence studies. It sought a ruling whether such imports were covered by Sl. No. 226 of Schedule I to Notification No. 09/2025-Integrated Tax (Rate), which applies 5% IGST to “All Drugs and medicines including their salts and esters and diagnostic test kits; formulations manufactured from bulk drugs (other than those specified at nil at S. No. 113 of notification No. 10/2025-Integrated Tax (Rate) dated 17th September, 2025)”, and, if not, what rate applied under Chapters 28 or 29. The applicant argued that “drug” under the Drugs and Cosmetics Act, 1940 has a wide meaning encompassing substances intended for use as components of drugs, that bulk drugs/API are regulated and licensed as drugs, and that the words “30 or any Chapter” in Sl. No. 226 demonstrate that the concessional entry is not confined to finished formulations falling under Chapter 30. It also relied on decisions treating bulk drugs as drugs and on the principle that a specific entry prevails over a general tariff entry.
