Bulk Drug API Imports Qualify for 5% IGST: CAAR Mumbai

By CA Sandeep Kanoi Custom Duty Judiciary August 26, 2026

Case Name: In re Torrent Pharmaceuticals Limited (CAAR Mumbai)
Appeal Number: Only available for paid members
Date of Judgement/Order: Only available for paid members
Courts: Advance Rulings, CAAR

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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.

The CAAR examined Section 3(7) of the Customs Tariff Act, 1975, the wording of Sl. Nos. 226 and 113 of the relevant IGST notifications, the Drugs and Cosmetics Act, 1940, the Drugs (Prices Control) Order, 2013 and the statutory licensing framework applicable to the imported APIs. It observed that the definition of “drug” under Section 3(b) of the Drugs and Cosmetics Act is wide and expressly includes substances intended for use as components of drugs. The Authority further noted that an API/bulk drug, though used as an ingredient in a pharmaceutical formulation rather than necessarily supplied directly for therapeutic consumption, does not thereby cease to be a “drug”. It also considered the regulatory approvals/licences furnished by the applicant and the definitions applicable to bioavailability studies, bioequivalence studies and clinical trials. In discussing the judicial position, the Authority referred to decisions including Burroughs Wellcome (I) Ltd. v. Commissioner of Customs, Chennai, Cipla Ltd. v. Commissioner of Customs, Chennai, Astra Laboratories Ltd. v. CCE and Aurobindo Pharma Ltd., as well as the Supreme Court’s Constitution Bench decision in Commissioner of Customs (Import), Mumbai v. Dilip Kumar & Company, 2018 (361) E.L.T. 577 (S.C.) on interpretation of taxing and exemption notifications. The Authority also took note of its own recent ruling in In re Cipla Limited, where a similar issue concerning bulk drugs had been considered. It ultimately held that the expression “All Drugs and medicines” in Sl. No. 226 is sufficiently wide to cover the applicant’s bulk drugs/APIs, notwithstanding their classification under Chapters 28 or 29, particularly because the entry itself applies to goods falling under “30 or any Chapter”. Accordingly, the subject bulk drugs/APIs were held eligible for the concessional IGST rate of 5% under Sl. No. 226 of Schedule I to Notification No. 09/2025-Integrated Tax (Rate), provided the particular bulk drug/API is not covered by the exclusion relating to goods specified at Sl. No. 113 of Notification No. 10/2025-Integrated Tax (Rate). Since Question No. 1 was answered in the affirmative, the alternative question regarding the rate otherwise applicable under Chapters 28 or 29 did not arise.

Cases Discussed

Burroughs Wellcome (I) Ltd. v. Commissioner of Customs, Chennai, 2007 (216) E.L.T. 522 (Tri.-Mumbai) — referred to on the interpretation of the expression “drugs” and treatment of bulk drugs.
Cipla Ltd. v. Commissioner of Customs, Chennai, 2007 (218) E.L.T. 547 (Tri.-Chennai) — considered in support of the proposition that bulk drugs are drugs and on availability of the more beneficial exemption where applicable.
Astra Laboratories Ltd. v. CCE, 2009 (233) E.L.T. 372 (Tri.-Bang.) — referred to while considering the meaning and treatment of bulk drugs.
Aurobindo Pharma Ltd., 2009 (247) E.L.T. 206 (Tri.-Bang.) — referred to for the proposition that bulk drugs may fall within the expression “drugs”.
Commissioner of Customs (Import), Mumbai v. Dilip Kumar & Company, 2018 (361) E.L.T. 577 (S.C.) — considered on interpretation of taxing provisions and exemption notifications.

FULL TEXT OF THE JUDGMENT/ORDER OF CAAR MUMBAI

Customs Authority for Advance Rulings, Mumbai

In re Torrent Pharmaceuticals Limited

F. No. CAAR/CUS/APPL/90, 91, 92/26-O/o Comm-CAAR-Mumbai

Ruling No. & date: CAAR/MUM/ARC/73,74,75/2026-27 dated 24.08.2026

Name and address of the applicant: M/s Torrent Pharmaceuticals Limited, Ashram Road, Ahmedabad – 380009, Gujarat.

Concerned Commissionerate:

1. The Commissioner of Customs (Import), Air Cargo Complex, Sahar, Andheri East, Mumbai – 400099.

2. The Principal Commissioner of Customs, Ahmedabad, 1st Floor, Custom House, Near All India Radio, Income Tax Circle, Navrangpura, Ahmedabad – 380009.

3. Commissioner of Customs, Nhava Sheva-III, Nhava Sheva-II, Jawaharlal Nehru Customs House, Nhava Sheva, Tal: Uran, Dist-Raigad, Maharashtra-400707.

Advance Ruling

M/s Torrent Pharmaceuticals Limited (IEC No. 0888038241) (hereinafter referred to as “the Applicant”) filed an application (CAAR-1) for advance ruling in the Office of Secretary, Customs Authority for Advance Ruling (CAAR) Mumbai. The said applications were received in the secretariat of the CAAR, Mumbai on 21.04.2026 along with the enclosures in terms of Section 28H(1) of the Customs Act, 1962 (hereinafter referred to as the “Act”). The Applicant is seeking clarification on whether Integrated Goods and Services Tax (hereinafter referred to as “IGST”) is leviable @5% for the import of “bulk drugs or Active Pharmaceutical Ingredient (API)” in terms of Sl. No. 226 of Schedule-I of the Notification No.9/2025-Integrated Tax (Rate) dated 17.09.2025 under the Customs Tariff Act, 1975.

2. Question(s) on which Advance Ruling is required:

Question 1: Whether Integrated Goods and Services Tax (hereinafter referred to as the “IGST”) is leviable @5% for the import of bulk drugs in terms of Sl. No. 226 of Schedule I of Notification No. 9/2025-Integrated Tax (Rate) dated 17.09.2025 (hereinafter referred to as the “IGST Rate Notification”)?

Question 2: If not, then what is the correct rate of IGST leviable for the import of bulk drugs falling under chapter 28 or 29 of the Schedule to Customs Tariff Act, 1975?

3. Applicant’s eligibility for Advance Ruling:

The applicant holds a valid IEC No. 0888038241 and therefore qualifies as an “applicant” under Section 28E(c) of the Customs Act, 1962. The question on which the advance ruling is sought is in respect of section, classification or whether Integrated Goods and Services Tax (hereinafter referred to as “IGST”) is leviable @5% for the import of “bulk drugs or Active Pharmaceutical Ingredient (API)” in terms of Sl. No. 226 of Schedule-I of the Notification No.9/2025-Integrated Tax (Rate) dated 17.09.2025 under the Customs Tariff Act, 1975, which is admissible under Section 28I(2). The relevant Section of the Customs Act, 1962, has been reproduced below:

Section 28E. Definitions.—

“(a) ‘applicant’ means any person,—

(i) holding a valid Importer-exporter Code Number granted under section 7 of the Foreign Trade (Development and Regulation) Act, 1992; or

Section 28H. Application for advance ruling.—

(1) An applicant desirous of obtaining an advance ruling under this Chapter may make an application in such form and in such manner and accompanied by such fee as may be prescribed, stating the question on which the advance ruling is sought.

(2) The question on which the advance ruling is sought shall be in respect of,—

(d) applicability of notification issued in respect of tax or duties under this Act or the Customs Tariff Act, 1975 (51 of 1975) or any tax or duty chargeable under any other law for the time being in force in the same manner as duty of customs leviable under this Act or the Customs Tariff Act.

The activity involved pertains to proposed/future imports as contemplated under Section 28E of the Customs Act, 1962, though the applicant has also stated that the applicant purchases and imports a wide range of Bulk Drugs after obtaining the requisite license. The applicant has declared that no proceedings involving the same issue are pending before any Customs authority. Applicant’s “principal port of import” of LCL/air has not ever been decided by the appellate Tribunal or any Court. Accordingly, the application appears admissible under Section 28-I(2) of the Customs Act, 1962.

4. Applicant’s Submissions:

4.1 Applicant is a pharmaceutical company incorporated in 1972. The applicant is a leading manufacturer and supplier of pharmaceutical products.

4.2 In connection with its business, the Applicant purchases and imports a wide range of Bulk Drugs after obtaining the requisite licence. The Bulk Drugs so imported are Active Pharmaceutical Ingredients (APIs). These imported ingredients are used for the manufacture of formulation i.e. dosage form of drug and occasionally for testing, clinical research and Bioequivalence study. These imported ingredients, which are active ingredients for medicines, are hereinafter collectively referred to as “bulk drugs”.

4.3 Bulk drugs are classified under Chapter 28 or Chapter 29 as they are organic and inorganic chemicals.

4.4 The present application pertains to determination of IGST payable on the import of these bulk drugs. The relevant portion from the IGST Rate Notification at Sl. No. 226 of Notification No. 9/2025-Integrated Tax (Rate) dated 17th September 2025 is extracted below:

Sl. No.	Chapter/Heading/Sub-heading/Tariff item	Description of goods
226.	30 or any Chapter	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)

4.5 Sl. No. 113 of Notification No. 10/2025-Integrated Tax (Rate) dated 17th September, 2025 is extracted below:

Sl. No.	Chapter/Heading/Sub-heading/Tariff item	Description of goods
113.	30 or any Chapter	Drugs or medicines listed in Annexure I

4.6 The above is the entry applicable for IGST at NIL rate. The products for which the present ruling is sought are not covered under Annexure I, therefore the same is not applicable in the present case.

4.7 The bulk drugs in question are imported after procuring the following licenses under the Drugs and Cosmetics Act, 1940:

Form No./License No.	Title of License Issued	Illustrative Copy enclosed herewith
Form 10	License to import drugs (excluding those specified in Schedule X) to the Drugs and Cosmetics Rules, 1945	License No. IL/BD-015614 BD-249 dated 17.01.2025
Form 11	License to import drugs for the purposes of examination, test or analysis	Licence No. SW/OD/11/2025/000009092 dated 24.01.2025
Form CT-17	License to Import New Drug or Investigational New Drug for the purpose of Clinical Trials or Bioavailability or Bioequivalence study or for examination, test and analysis	Licence No. SW/SND/CT-17/2025/00002144 dated 17.12.2025

4.8 The Applicant has been importing the Bulk Drugs in question under Form 10, 11 & CT-17 licence and has been discharging IGST @18% in terms of Notification No. 9/2025-Integrated Tax (Rate) dated 17.09.2025. However, the Applicant is of the view that IGST is payable correctly @5% only. Accordingly, the present application is being made.

QUESTION OF LEVY OF IGST ON THE IMPORT OF BULK DRUGS

4.9 The levy of IGST on imports into India follows from Section 3(7) of the Customs Tariff Act, 1975. The relevant portion is extracted below:

“SECTION 3. Levy of additional duty equal to excise duty, sales tax, local taxes and other charges.—

—

(7) Any article which is imported into India shall, in addition, be liable to integrated tax at such rate, not exceeding forty per cent, as is leviable under section 5 of the Integrated Goods and Services Tax Act, 2017 on a like article on its supply in India, on the value of the imported article as determined under sub-section (8) [or sub-section (8A), as the case may be].”

4.10 IGST Rates are notified vide Notification No. 9/2025-Integrated Tax (Rate). The relevant portion of Schedule I (5%) to the IGST Rate Notification is extracted below:

Sl. No.	Chapter/Heading/Sub-heading/Tariff item	Description of goods
226.	30 or any Chapter	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)

4.11 Sl. No. 113 of Notification No. 10/2025-Integrated Tax (Rate) dated 17.09.2025 is extracted below:

Sl. No.	Chapter/Heading/Sub-heading/Tariff item	Description of goods
113.	30 or any Chapter	Drugs or medicines listed in Annexure I

4.12 The above is the entry applicable for IGST at NIL rate. The products for which the present ruling is sought are not covered under Annexure I, therefore the same is not applicable in the present case.

4.13 The Applicant submits that on import of bulk drugs, IGST @5% alone is applicable under the aforesaid Sl. No. 226 of Schedule I of Notification No. 9/2025-Integrated Tax (Rate).

4.14 For 5% IGST to be applicable, the imports should satisfy the following conditions:

i. Be classified under Chapter 30 or any other Chapter;

ii. Be Drugs or medicines; and

iii. Not be covered under Sl. No. 113 of Notification No. 10/2025-Integrated Tax (Rate) dated 17.09.2025.

The bulk drugs in question satisfy all of the above conditions. The submissions in this regard are set out in detail below:

Condition i: The entry is applicable to goods irrespective of the classification adopted for the goods under any Chapter. Chapter 30 is merely indicative and goods falling under any chapter can fall under this entry.

4.16 As per Sl. No. 226 of the Schedule I, drugs and medicines classified under any Chapter fall under its ambit and are subject to levy of IGST @5%. The bulk drugs in question are generally classified under Chapter 28 or 29. It is clear that these bulk drugs, even if not classified under Chapter 30, still fall under the ambit of the entry as it is applicable to drugs and medicines of any Chapter. Therefore, the first condition is met.

Condition ii: From a combined reading of the definitions of bulk drugs and drugs under various laws and literatures, it is clear that the term “All Drugs and medicines” is inclusive of bulk drugs and hence, levy of IGST in terms of Sl. No. 226 of Schedule I to the Notification shall apply to bulk drugs.

4.17 It is submitted that the term “all drugs and medicines” is not defined under the Notification or under the Customs Tariff. Considering the nature of the products in question, the same should be interpreted by considering the relevant provisions under the Drugs Laws of India. Reference is made to the definitions under the Drugs (Price Control) Order, 2013. The relevant extracts are as below:

“(b) ‘active pharmaceutical ingredients or bulk drug’ means any pharmaceutical, chemical, biological or plant product including its salts, esters, isomers, analogues and derivatives, conforming to standards specified in the Drugs and Cosmetics Act, 1940 (23 of 1940) and which is used as such or as an ingredient in any formulation;

—

(f) ‘formulation’ means a medicine processed out of or containing one or more drugs with or without use of any pharmaceutical aids, for internal or external use for or in the diagnosis, treatment, mitigation or prevention of disease and, but shall not include—

(i) any medicine included in any bonafide Ayurvedic (including Siddha) or Unani (Tibb) systems of medicines;

(ii) any medicine included in the Homoeopathic system of medicine; and

(iii) any substance to which the provisions of the Drugs and Cosmetics Act, 1940 (23 of 1940) do not apply;”

4.18 Section 3 of the Drugs and Cosmetics Act, 1940 provides the definition of “drugs”. The relevant portion is extracted below:

“(b) ‘drug’ includes—

(i) all medicines for internal or external use of human beings or animals and all substances intended to be used for or in the diagnosis, treatment, mitigation or prevention of any disease or disorder in human beings or animals, including preparations applied on human body for the purpose of repelling insects like mosquitoes;

(ii) such substances (other than food) intended to affect the structure or any function of the human body or intended to be used for the destruction of vermin or insects which cause disease in human beings or animals, as may be specified from time to time by the Central Government by notification in the Official Gazette;

(iii) all substances intended for use as components of a drug including empty gelatin capsules; and

(iv) such devices intended for internal or external use in the diagnosis, treatment, mitigation or prevention of disease or disorder in human beings or animals, as may be specified from time to time by the Central Government by notification in the Official Gazette, after consultation with the Board.”

4.19 Thus, from a combined reading of the definition of bulk drugs under the Drugs (Price Control) Order, 2013 and the definition of drugs under the Drugs and Cosmetics Act, 1940, it is clear that the “drugs” includes substances used as components of a drug i.e. as an ingredient of a drug. When even a gelatin capsule is treated as a drug, it goes without saying that the API on account of which the final medicine is effective, too is nothing but a drug.

4.20 Furthermore, under the Drugs and Cosmetics Act and Rules, for import of a bulk drug, the importer needs to procure numerous licenses and registrations which are applicable to drugs. That is, for purpose of licensing under the Drugs laws of India, bulk drugs are treated as drugs only. This is evident from the following licenses/registrations issued to the Applicant for import of bulk drugs.

Form No./License/Registration under Section/Provisions	Relevant extracts from the Section/Provision
Form 10 (Rule 23 of the Drugs and Cosmetics Rules, 1945, as amended)	Rule 23—Import licences.—An import licence in Form 10 shall be required for import of drugs, excluding those specified in Schedule X, and an import licence in Form 10A shall be required for the import of drugs specified in Schedule X.
Form CT-17 (Rule 68 to 72 of the New Drugs and Clinical Trials Rules, 2019)	Rule 68—Grant of licence for import of new drug or investigational new drug for clinical trial or bioavailability or bioequivalence study or for examination, test and analysis.

4.21 There is no definition of “bulk drug” in the Drugs and Cosmetics Act, 1940. The fact that bulk drugs and Cosmetics Act, 1940 does not draw a distinction between bulk drugs and drugs for final consumption, entails that the two are treated at par only.

4.22 CBIC has reiterated time and again that when it comes to import of Drugs and medicines, the provisions of the Drug & Cosmetics Law and the Licenses/Registrations issued by CDSCO must be considered even for interpreting Tax provisions. This is evident from various Circulars/Communications issued by CDSCO.

4.23 Thus, as the bulk drugs in question are “Drugs” under the Drugs and Cosmetics Laws of India, they must be considered as “drugs” even for purposes of IGST Notification.

Even in common parlance, bulk drugs are “Drugs”

4.24 Even as per medical literature, bulk drugs are considered to be drugs only. Reference is also made to the definition of “drug” and “medicine” under medical dictionaries.

4.25 Thus, it is clear that the term “drugs” generally includes all substances intended to be used for or in the diagnosis, treatment, mitigation or prevention of any disease or disorder in human beings; and also include substances intended for use as components of a drug. Therefore, it is submitted that bulk drugs such as active pharmaceutical ingredients also fall under the ambit of drugs only.

Even as per judicial precedents, the term “drugs” is inclusive of bulk drugs

4.26 It is submitted that there is a plethora of decisions that hold that the term “drugs” is inclusive of “bulk drugs”. The Tribunal in Burroughs Wellcome (I) Ltd. v. Commissioner of C. Ex. and Cus., Mumbai held that the phrase can include bulk drugs as well. The Tribunal observed that the term life-saving drugs was not defined in the exemption notification, but upon the term of “drugs” under the Drugs (Prices Control) Order included “bulk drugs”, and accordingly the same was applied to the term life saving drugs.

4.27 The definition of “drugs” under the erstwhile Drugs (Prices Control) Order, 1995 was as below:

“(a) ‘drug’ includes—

(i) all medicines for internal or external use of human beings or animals and all substances intended to be used for or in the diagnosis treatment, mitigation, or prevention of any disease or disorder in human beings or animals, including preparations applied on human body for the purpose of repelling insects like mosquitoes;

(ii) such substances, intended to affect the structure or any function of the human or animal body or intended to be used for the destruction of vermin or insects which cause disease in human beings or animals, as may be specified from time to time by the Government by notification in the Official Gazette; and

(iii) bulk drugs and formulations;”

4.28 Relying on the above-mentioned decision and the definition of drugs, the Tribunal in Cipla Ltd. v. Commissioner of Customs, Chennai [2007 (218) E.L.T. 547 (Tri.-Chennai)] held that it is beyond doubt that bulk drugs are also drugs, and that they are defined as such under the Drugs (Prices Control) Order, 1995.

4.29 The aforesaid decisions were followed by the Tribunal in Astra Laboratories Ltd. v. CCE & Cus., Hyderabad-I, 2009 (233) E.L.T. 372 (Tri.-Bang.).

4.30 Though the definition of “drug” does not exist under the present Drugs (Prices Control) Order 2013, the definition of “bulk drugs” under the Drugs (Prices Control) Order 2013, and the definition of “drugs” under the Drugs and Cosmetics Act, 1940 should be read conjointly. Reliance is placed on Clause (2) of the Drugs (Prices Control) Order 2013.

4.31 Thus, in the absence of the definition of “drugs” under the relevant IGST Notification or the Drugs and Cosmetics Act, 1940, as submitted in the foregoing paragraphs, from a combined reading of the present definitions under the Drugs (Prices Control) Order, 2013 and the Drugs and Cosmetics Act, 1940, it is clear that bulk drugs are to be treated as drugs only.

4.32 Further, in the present case when the notification also does not define drugs or bulk drugs and nor does it make a specific distinction between the two, it is submitted that the interpretation that bulk drugs are drugs should be adopted. Reliance in this regard is placed on the Tribunal decisions in Aurobindo Pharma Ltd. v. CCE, Hyderabad-I and other decisions.

4.33 Further, reference is also made to recent decision of the Hon’ble CESTAT, Ahmedabad in the case of Shri Balaji Impex v. CCE & ST wherein reliance was placed on the decisions of Cipla Ltd. (supra) and Hetero Drugs Ltd. to hold that drugs and bulk drugs are one and the same.

4.34 Thus, it is submitted that there is enough jurisprudence which treats the term “drugs” to include bulk drugs.

Restricting the entry to cover only drugs and medicines for final consumption would render the entry redundant

4.35 From a perusal of the entry, it is clear that it covers the following: (a) all drugs and medicines; (b) salts and esters of such drugs and medicines; (c) diagnostic test kits; and (d) formulations manufactured from bulk drugs.

4.36 The usage of the semi colon (;) between “all drugs and medicines including their salts and esters and diagnostic test kits” and “formulations manufactured from bulk drugs” indicated that these are two separate items covered under the entry.

4.37 Reliance is placed on the Tribunal decision of Ward and Co. v. Collector of Customs, wherein the semi-colon was interpreted to separate the former group from the latter group. The decision was maintained by the Supreme Court in Collector of Customs v. K. Mohan & Co..

4.38 From the fact that (a) “formulations manufactured from bulk drugs”, are mentioned separately, it can be inferred that (a) “all drugs and medicines” intends to cover “bulk drugs” only, while (d) covers formulations, drugs and medicines which are manufactured from such bulk drugs.

4.39 Furthermore, all ready to use drugs are covered under Chapter 30 of the Customs Tariff. The fact that the Notification entry covers goods falling under “Chapter 30 or any other chapter” entails that it is not restricted to formulations for final consumption, as those would necessarily be classified under Chapter 30. Thus, drugs under any other chapter are also covered under the entry.

4.40 It is a settled principal of law that no such interpretation shall be adopted that renders an entry redundant. Reliance in this regard is placed on the Hon’ble Supreme Court in Bansal Wire Industries Ltd. v. State of U.P..

4.41 The Hon’ble High Court in TVL. Transdomestic Overseas Pvt. Ltd. v. VOL, in every word of the statute should be given meaning and one should not construe a statute in such a way as to render certain words redundant.

4.42 Reliance is also placed on the decision of Princes (Mumbai) Ltd. v. Asstt. Commercial Tax Officer.

4.43 Therefore, the entry should be interpreted in such a manner that it is not rendered redundant. Accordingly, the term “drugs” should also cover bulk drugs.

API for testing, clinical research and bioequivalence study also fall under the ambit of “drugs” and are leviable with IGST @5%

4.44 The relevant definitions from the Drugs and Cosmetics Rules, 1945 are extracted below:

“(b) ‘drug’ includes—

(iii) all substances intended for use as components of a drug including empty gelatin capsules; and

4.45 Prior to 2019, the definitions of “bioavailability study”, “bioequivalence study” and “clinical trials” were under the Drugs and Cosmetics Rules, 1945. However, with the introduction of the New Drugs and Clinical Trials Rules, 2019, the definitions were omitted from the Drugs and Cosmetics Rules 1945. The relevant definitions from the New Drugs and Clinical Trials Rules, 2019 are extracted below.

4.46 It is submitted that from a combined reading of the definitions of “drugs”, “bioavailability study” and “clinical trials”, it is clear that drugs cover even those products which are for bioavailability or bioequivalence studies, or clinical trials.

4.47 It is submitted that the definitions of bioavailability study, bioequivalence studies and clinical trials would be rendered redundant if the definition of “drugs” itself was construed to not cover the drugs which are intended for such purposes.

4.48 Thus, as long as the product in question is regarded as “Drug” by the CDSCO, irrespective of whether it is for manufacture of medicines, or for clinical trials, it must be considered to be eligible to avail benefit of Sl. No. 226 of Notification No. 9/2025-Integrated Tax (Rate) dated 17.09.2025.

The bulk drugs classified under Chapter 28 or Chapter 29 are still rightly required to levy under Sl. No. 226 of Schedule I and not under Sl. No. 35 or 36 of Schedule II to the IGST Rate Notification. In case of any ambiguity in the IGST Rate Notification, it should be interpreted in favour of the taxpayer.

4.49 Sl. Nos. 35 and 36 of Schedule II to IGST Rate Notification cover goods of Chapter 28 and 29 respectively. The relevant portion of the notification is extracted below:

35.	28	All inorganic chemicals [other than those specified in notification No. 10/2025-Central Tax (Rate) dated 17th September 2025 or other Schedules of this notification]
36.	29	All organic chemicals other than gibberellic acid

4.50 Sl. No. 226 of Schedule I to the IGST Rate Notification is extracted again for reference:

226.

30 or any Chapter

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)

4.51 Furthermore, it is submitted that Sl. No. 226 of Schedule I is a more specific entry as opposed to the generic entry of Sl. No. 35 or 36 of Schedule II, and thus the specific entry would prevail.

4.52 It is submitted that in case of any ambiguity in the interpretation of the IGST Rate Notification, such as various applicable entries, it should be interpreted in favour of the taxpayer. Reliance in this regard is placed on the Tribunal decision of Samsung India Electronics Pvt. Ltd. v. Principal Commissioner of Customs, New Delhi.

4.53 From the above, it is clear that a taxing notification, which prescribes a levy and is not prescribing an exemption, is to be interpreted in favour of the taxpayer. Reliance is also placed on the decision of the Supreme Court in Commissioner of Customs (Import), Mumbai v. Dilip Kumar & Company, 2018 (361) E.L.T. 577 (S.C.), whereby it has been held that in case of an ambiguity in a taxing statute and where two interpretations can be adopted, the benefit of interpretation is to be given to the assessee. It is only in the case of an exemption notification that ambiguity is interpreted in favour of the Revenue.

4.54 Ruling CAAR/Mum/ARC/161,162/2025-26 dated 17.03.2026 was issued to Cipla Limited, by CAAR, Mumbai (enclosed as “Exhibit-C”). This Ruling squarely covers the issue at hand and in the context of Notification No. 9/2025-Integrated Tax (Rate) dated 17.09.2025 has clearly held that benefit of 5% IGST under Sl. No. 226 of the Notification is available to APIs or Bulk drugs imported into India as well. The Ruling covers import for further manufacture, as well as for clinical trials, and holds that in both cases IGST applicable on import will be 5% only.

GST Advance Rulings on similar issue

4.55 The Applicant would like to submit that prior to the Notification No. 9/2025-Integrated Tax (Rate) dated 17.09.2025, there was Notification No. 1/2017-Integrated Tax (Rate) dated 28.06.2017 effective from 01.07.2017 to 21.09.2025. The two Sl. Nos. therein which were relevant to Drugs are reproduced below.

4.56 With regard to the above, to the best of the Applicant’s knowledge, there are 4 Advance Rulings dealing with the question whether “Drugs” in Sl. No. 180 above include “bulk drugs”. 3 of them are in favour of the Applicant and 2 are against. The same are analysed below:

1. In Re: Laurus Labs Ltd. — “Drugs” includes bulk drugs.

2. In Re: Biocon Ltd. — “Drugs” includes bulk drugs.

3. In Re: Sterling Biotech Ltd. — contrary view.

4. In Re: M/s. Altis Finechem Pvt. Ltd. — contrary view.

4.57 The above Rulings may not carry binding or legal position. However, in the interest of completion of information, the above Rulings have been highlighted to the Hon’ble Authority.

4.58 All the aforesaid GST Rulings have been considered by Hon’ble CAAR Mumbai prior to issuance of Ruling dated 17.03.2026 to Cipla Limited. The Authority has clearly relied on Rulings of Laurus and Biocon. The Authority has distinguished the Rulings of Sterling Biotech and Altis on the ground that the complete definition of “drugs” was not considered by these Rulings.

4.59 Thus, the above recent developments support the Applicant’s present application in support of payment of 5% GST on imports of APIs/Bulk Drugs.

Condition iii: Not be covered under Sl. No. 113 of Notification No. 10/2025-Integrated Tax (Rate) dated 17.09.2025

4.60 Sl. No. 113 to Notification No. 10/2025-Integrated Tax (Rate) dated 17.09.2025 covers “Drugs or medicines listed in Annexure I”. As submitted in the foregoing paragraphs, the products imported by the Applicant do not figure in Sl. No. 113, by virtue of not falling under Annexure I to that notification. Therefore, condition iii is also met.

4.61 In light of the above, it is clear that bulk drugs used for manufacture of formulations should be subject to levy @5% in terms of Sl. No. 226 of Schedule I to the IGST Rate Notification and no other entry.

5. Port of Import and reply from jurisdictional Commissionerate:

The applicant in their CAAR-1 indicated that they intend to import the subject goods at the jurisdiction of Office of the Commissioner of Customs (Import), Air Cargo Complex, Sahar, Andheri East, Mumbai, the Principal Commissioner of Customs, Ahmedabad, 1st Floor, Custom House, Near All India Radio, Income Tax Circle, Navrangpura, Ahmedabad, and Commissioner of Customs, Nhava Sheva-II, Jawaharlal Nehru Customs House, Nhava Sheva, Uran, Raigad, Maharashtra. The application was forwarded to the concerned Commissionerates for their comments on 28.04.2026, 28.04.2026 and 04.05.2026 respectively. However, comments/reply were received only from the jurisdictional authority of the Principal Commissioner of Customs, Ahmedabad. No comments/reply were received from the other two concerned Commissionerates.

5.1 Comments/Reply of the Jurisdictional Commissionerate:

The Principal Commissioner of Customs, Ahmedabad, vide letter dated 22.05.2026, furnished comments on the application for advance ruling filed by M/s Torrent Pharmaceuticals Limited regarding the levy of IGST on import of Bulk Drugs/Active Pharmaceutical Ingredients (APIs).

Question 1: Whether IGST is leviable @5% for the import of Bulk Drugs in terms of Sl. No. 226 of Schedule I of Notification No. 9/2025-Integrated Tax (Rate) dated 17.09.2025.

Comments: (i) Text of Sl. No. 226 of Schedule I to Notification No. 9/2025-Integrated Tax (Rate) dated 17.09.2025 whereby IGST is applicable @5% is as below:

226.

30 or any Chapter

that All Drugs and medicines including their salts and esters and diagnostic test kits under chapter 30 or any other chapter falls under this and eligible for the IGST benefit, @5%.

(ii) The Advance Ruling in question is sought for import of Bulk Drugs. In this regard, the definition of “drug” under the Drugs (Price Control) Order, 1995 may follows:

“(i) ‘drug’ includes—

(i) ……

(ii) ……

(iii) bulk drugs and formulations;”

From the above control order, it appears that “drug” interalia includes “bulk drugs”, hence, IGST is leviable @5% for the import of Bulk Drugs in terms of Sl. No. 226 of Schedule I of Notification No. 9/2025-Integrated Tax (Rate) dated 17.09.2025.

(iii) Also, kind reference is invited to the Advance Ruling passed by the Customs Authority for Advance Ruling in case of M/s Cipla Limited as detailed below:

Bulk drugs/Active Pharmaceutical Ingredients (APIs), whether imported for manufacture of formulations or for testing, clinical trials, bioavailability or bioequivalence studies, qualify as “All Drugs” under Sl. No. 226 of Schedule I to Notification No. 9/2025-Integrated Tax (Rate) dated 17.09.2025, provided they are not covered under Sl. No. 113 of Notification No. 10/2025-Integrated Tax (Rate).

In view of above, the answer of the question no. 1 is yes.

Question 2: N.A.

6. Details of Personal Hearing:

A personal hearing in the matter was held on 11.06.2026. The authorised representative of the applicant appeared and explained in detail the nature and intended use of the products proposed to be imported. He submitted that the product falls under the category of “Drug” and is eligible for the concessional rate of Integrated Goods and Services Tax (IGST) in terms of Notification No. 10/2025-Integrated Tax (Rate) dated 17.09.2025 in support of their contention, the Applicant relied upon the provisions of the Drugs and Cosmetics Act, 1940, particularly for determining the scope and definition of “drug”. The Authorised Representative further submitted that the said notification is a rate notification prescribing the applicable rate of tax and is not an exemption notification, and therefore the benefit provided thereunder is required to be considered accordingly.

6.1 No representative appeared on behalf of the Department at the time of the personal hearing.

7. Discussion and Findings

7.1 I have carefully considered the application filed by the applicant namely, M/s Torrent Pharmaceuticals Limited, comments received from concerned jurisdiction commissionerates, the submission made by the applicant during the personal hearing and the documents and materials placed on record.

7.2 At the outset, I find that the issue raised in the question in the form CAAR-1 is squarely covered under Section 28H(2) of the Customs Act, 1962, being a matter related applicability of duty (IGST) rate in the present case under the provisions of this Act. The question posed for advance ruling is:

“Question 1: Whether Integrated Goods and Services Tax (hereinafter referred to as the ‘IGST’) is leviable @5% for the import of bulk drugs in terms of Sl. No. 226 of Schedule 1 of Notification No. 9/2025-Integrated Tax (Rate) dated 17.09.2025?

Question 2: If not, then what is the correct rate of IGST leviable for the import of bulk drugs falling under chapter 28 or 29 of the Schedule to Customs Tariff Act, 1975?”

7.3 Statutory Framework

7.3.1 In terms of Section 3(7) of the Customs Tariff, 1975, any article imported into India is liable to IGST at such rate as is leviable under Section 5 of the IGST Act, 2017 on a like article supplied in India.

7.3.2 IGST rates are notified vide Notification No. 09/2025-Integrated Tax (Rate) dated 17.09.2025. Sl. No. 226 of Schedule I (5%) reads as under:

226.

30 or any Chapter

I observe that from the perusal of the above entry it is clear Sl. No. 226 of Schedule I (5%) covers the following:

(a) all drugs and medicines including their salts and esters;

(b) diagnostic test kits;

7.3.3 Sl. No. 113 of Notification No. 10/2025-Integrated Tax (Rate) grants NIL rate to “Drugs or medicines listed in Annexure I”. The relevant portion of notification is as below:

113.

30 or any Chapter

Drugs or medicines listed in Annexure I

Annexure I appended to Schedule mentions the following item at Sr. No. 113 of the said notification.

It is observed that the Applicant has not specified the individual names of the Bulk Drugs/APIs proposed to be imported. Therefore, the applicability of the exclusion contained in Sl. No. 113 of Notification No. 10/2025-Integrated Tax (Rate) is required to be examined with reference to the individual goods at the time of import. On the basis of the material placed on record, no specific Bulk Drug/API proposed in the present application has been shown to be covered under Annexure-I.

7.4 Nature of the Goods

7.4.1 The Applicant imports bulk drugs, i.e. Active Pharmaceutical Ingredients (APIs), classifiable under Chapter 28 or Chapter 29 of the Customs Tariff. These APIs are used:

i. In manufacture of pharmaceutical formulations; and

ii. In certain cases, for testing, clinical trials, bioavailability and bioequivalence studies.

7.4.2 I observe that Active Pharmaceutical Ingredients (APIs) are substances which constitute an active component of a drug and are used in the manufacture of pharmaceutical formulation. API are regulated under the provisions of the Drugs and Cosmetics Act, 1940 and the rules made thereunder, and their import is subject to the prescribed statutory requirements and licensing provisions. In support of the nature and regulatory status of the subject goods, the Applicant has submitted copies of relevant licences issued under the Drugs and Cosmetics Rules, 1945 as detailed below:

Form No./License No.	Title of License Issued	Illustrative Copy enclosed herewith
Form 10	License to import drugs (excluding those specified in Schedule X) to the Drugs and Cosmetics Rules, 1945	License No. IL/BD-015614 BD-249 dated 17.01.2025
Form 11	License to import drugs for the purposes of examination, test or analysis	Licence No. SW/OD/11/2025/000009092 dated 24.01.2025
Form CT-17	License to Import New Drug or Investigational New Drug for the purpose of Clinical Trials or Bioavailability or Bioequivalence study or for examination, test and analysis	Licence No. SW/SND/CT-17/2025/00002144 dated 17.12.2025

7.4.3 Further, the applicant has submitted that there is no dispute regarding tariff classification under Chapters 28 or 29. Also, the issue raised in the present application is not regarding classification of the subject goods and the question raised in the CAAR application is confined to the applicable IGST rate.

7.5 As discussed above, Sl. No. 226 of Schedule I (5%) of Notification No. 09/2025-Integrated Tax (Rate) covers all drugs and medicines. The Applicant has contended that the “Bulk Drugs/APIs” are covered under the expression “All Drugs and Medicines” and are covered under Sl. No. 226 being drugs. Therefore, it is to be analysed:

“Whether ‘Bulk Drugs/APIs’ are covered under the expression ‘All Drugs and Medicines’ or otherwise”

7.5.1 The expression “drugs” is not defined in the IGST Rate Notification and neither in Customs Act. In such circumstances, recourse can be taken to the relevant statute governing the goods, namely the Drugs and Cosmetics Act, 1940.

7.5.2 I observe Section 3(b) of the Drugs and Cosmetics Act, 1940 defines “drug”. The said definition of drugs is produced as below:

“(b) ‘drug’ includes—

(iii) all substances intended for use as components of a drug including empty gelatin capsules; and

From the above definition of drugs it is evident that drugs covers:

• all medicines for internal or external use;

• all substances intended for diagnosis, treatment, mitigation or prevention of disease; and

• all substances intended for use as components of a drug.

7.5.3 I observe that Active Pharmaceutical Ingredients (APIs) are substances used as components of a drug. They are regulated under the Drug and Cosmetics Act and require statutory licences for import.

7.5.4 I observe that the bulk drugs are not specifically defined in Drugs and Cosmetics Act, 1940. Therefore, reference is made to the definitions under the Drugs (Price Control) Order, 2013. The relevant extracts are as below:

—

(i) any medicine included in any bonafide Ayurvedic (including Siddha) or Unani (Tibb) systems of medicines;

(ii) any medicine included in the Homoeopathic system of medicine; and

(iii) any substance to which the provisions of the Drugs and Cosmetics Act, 1940 (23 of 1940) do not apply;”

In view of above bulk drug refers to pharmaceutical or chemical substances used as such or as an ingredient in any formulation. Accordingly, I observe that on conjoint reading of the above definition of API with Section 3(b) of the Drugs and Cosmetics Act, bulk drugs/APIs bulk drugs falls within the statutory meaning of “drug”.

7.5.5 The applicant has submitted that Prior to 2019, the definitions of “bioavailability study”, “bioequivalence study” and “clinical trials” were also under the Drugs and Cosmetics Rules, 1945. However, with the introduction of the New Drugs and Clinical Trials Rules, 2019, the definitions were omitted from the Drugs and Cosmetics Rules 1945. The relevant definitions from the New Drugs and Clinical Trials Rules, 2019 are extracted below.

7.5.6 I observe that a combined reading of the definitions of “drugs”, “bioavailability study”, “bioequivalence study” and “clinical trial” makes it evident that the term “drugs” is wide enough to include products intended for use in bioavailability or bioequivalence studies, as well as for clinical trials. Therefore, the mere fact that the APIs imported for testing or research purposes and not for direct therapeutic use, does not, by itself, exclude it from the ambit of “drugs” under the applicable legal framework.

7.6 Judicial Precedents

7.6.1 The Applicant has relied upon various Tribunal decisions wherein it has been held that bulk drugs are also drugs or “drugs” is inclusive of “bulk drugs” including:

i) Burroughs Wellcome (I) Ltd. — 2007 (216) E.L.T. 522 (Tri.-Mum.)

ii) Cipla Ltd. v. Commissioner of Customs, Chennai — 2007 (218) E.L.T. 547 (Tri.-Chennai)

iii) Astra Laboratories Ltd. — 2009 (233) E.L.T. 372 (Tri.-Bangalore)

iv) Further, in Aurobindo Pharma Ltd. — 2009 (247) E.L.T. 206 (Tri.-Bang.), it was held that where a notification does not distinguish between “drugs” and “bulk drugs”, such distinction cannot be judicially introduced.

These decisions consistently held that bulk drugs are also drugs, particularly where the exemption/benefit entry uses the expression “drugs” without exclusion.

7.6.3 Advance ruling decisions:

(i) I observe that in CAAR/Mum/ARC/161,162/2025-26 dated 17.03.2026 was issued to Cipla Limited, by CAAR, Mumbai. This Ruling squarely covers the issue at hand and in the context of Notification No. 9/2025-Integrated Tax (Rate) dated 17.09.2025 has clearly held that benefit of 5% IGST under Sl. No. 226 of the Notification is available to APIs or Bulk drugs imported into India as well. The Ruling covers import for further manufacture, as well as for clinical trials, and holds that in both cases IGST applicable on import will be 5% only.

(ii) I observe that in Laurus Labs Ltd., 2018 (13) G.S.T.L. 472 (A.A.R.-GST) and Biocon Ltd., 2020 (43) G.S.T.L. 281 (App. A.A.R.-GST-Kar.), the Advance Ruling Authorities have taken the view that the expression “drugs” includes “bulk drugs”.

(iii) Though in Sterling Biotech Ltd., 2021 (1) TMI 572 – AAR, Gujarat and M/s. Altis Finechem Pvt. Ltd., 2021 (1) TMI 564 – AAR, Gujarat, the Advance Ruling Authorities have taken a contrary view, the said rulings are not binding on this Authority. Further, it is observed that in the aforesaid rulings, the complete and inclusive definition of “drug” under Section 3(b)(iii), particularly in relation to substances used as components of a drug, has not been examined in its entirety.

7.7 Interpretation of Sl. No. 226 of Schedule I of Notification No. 09/2025-Integrated Tax (Rate)

7.7.1 Sl. No. 226 employs the expression:

“All Drugs and medicines including their salts and esters and diagnostic test kits; formulations manufactured from bulk drugs.”

The presence of a semi-colon clearly demarcates two independent and distinct categories of goods, namely:

(i) All drugs and medicines (including salts, esters and diagnostic kits); and

(ii) Formulations manufactured from bulk drugs.

7.7.2 If the phrase “All drugs and medicines” were to be construed as being confined solely to finished dosage forms ready for retail consumption, the subsequent and specific reference to “formulations manufactured from bulk drugs” would be rendered redundant and superfluous. It is a settled canon of statutory interpretation that an entry must be construed in a manner that gives meaning and effect to every word used therein, and avoids any interpretation that would render a part of the provision otiose.

7.7.3 Moreover, the entry applies to goods falling under “Chapter 30 or any Chapter”. The deliberate use of the expression “or any Chapter” manifests a clear legislative intent to extend the scope of coverage beyond Chapter 30, thereby encompassing drugs and drug substances classifiable under other Chapters, including Active Pharmaceutical Ingredients (APIs) falling under Chapters 28 and 29.

7.7.4 Reliance is placed on the decision of the Hon’ble Supreme Court in Commissioner of Customs (Import), Mumbai v. Dilip Kumar & Company, 2018 (361) E.L.T. 577 (S.C.) wherein it was held that in case of ambiguity in a taxing provision, the interpretation favourable to the taxpayer must be adopted. The strict interpretation applicable to exemption notifications is distinct from the interpretation of a charging or taxing provision. Since Notification No. 09/2025-Integrated Tax (Rate) is a rate notification prescribing the applicable tax rate and not an exemption notification, the ambiguity therein ought to be resolved in favour of the Applicant. Accordingly, the benefit of the concessional rate under Sl. No. 226 of Schedule I is admissible to the subject goods.

7.8 Specific Entry Vis-à-vis General Entry:

The subject bulk drugs/APIs proposed to be imported are stated by the applicant to be classifiable under Chapter 28 or 29 are rightly covered under Sl. No. 226 of Schedule I attracting 5% IGST. Sl. No. 35 or 36 respectively of Schedule II of the Notification No. 9/2025-Integrated Tax (Rate).

7.8.1 Sl. No. 35 & 36 of the Notification prescribes the IGST at the rate of 18% for products falling under Chapter 28 & 29 respectively. The relevant extract is produced for case of reference:

35.	28	All inorganic chemicals [other than those specified in Notification No. 10/2025-Integrated Tax (Rate) dated 17th September 2025 or other Schedules of this notification]
36.	29	All organic chemicals other than gibberellic acid

7.8.2 The subject goods are Bulk Drugs/Active Pharmaceutical Ingredients and therefore, the applicable IGST rate is required to be determined with reference to the specific description of goods provided in the relevant rate notification. Although the subject goods may be classifiable under Chapter 28 or Chapter 29 or any other chemical composition the applicable IGST rate is governed by the specific entry covering the goods.

7.8.3 It is a well settled principle of law that a specific entry prevails over a general entry. Sl. No. 35 & 36 of Schedule II is a general entry covering goods falling under Chapter 28 & 29 on the basis of their tariff classification whereas Sl. No. 226 of Schedule I is a specific description-based entry covering “All Drugs and Medicines.” Since the subject goods are bulk drugs/API, the specific entry at Sl. No. 226 is applicable to the subject goods, subject to the exclusion specified therein.

7.8.4 Reliance is placed on the decision of the Hon’ble Supreme Court in Commissioner of Customs (Import), Mumbai v. Dilip Kumar & Company, 2018 (361) E.L.T. 577 (S.C.) wherein it was held that in case of ambiguity in a taxing provision, the interpretation favourable to the taxpayer must be adopted. The strict interpretation applicable to exemption notifications is distinct from the interpretation of a charging or taxing provision. Since Notification No. 09/2025-Integrated Tax (Rate) is a rate notification prescribing the applicable tax rate and not an exemption notification, the ambiguity therein ought to be resolved in favour of the Applicant. Accordingly, the benefit of the concessional rate under Sl. No. 226 of Schedule I is admissible to the subject goods.

7.8.5 Further reliance is placed on the Samsung India Electronics Pvt. Ltd. v. Principal Commissioner of Customs (2025) wherein the Tribunal held that a rate notification must be strictly construed, and any ambiguity must be interpreted in favour of the taxpayer and against the Revenue.

7.9 Nature of the Notification

7.9.1 I observe Notification No. 09/2025-Integrated Tax (Rate) is a IGST rate slab notification and not an exemption or concessional duty notification.

7.9.2 I observe that the applicant has placed reliance on the decision of the Hon’ble Supreme Court in Commissioner of Customs (Import), Mumbai v. Dilip Kumar & Company, 2018 (361) E.L.T. 577 (S.C.) wherein it was held that in case of ambiguity in a taxing or ambiguity in taxing statute, and where two interpretations are possible, the interpretation beneficial to the assessee should be adopted. However, in the case of an exemption notification, the same must be construed strictly in favour of the Revenue.

7.10 Eligibility of the subject Bulk Drugs/APIs for IGST Rate:

7.10.1 The proposed imports of the subject Bulk Drugs/Active Pharmaceutical Ingredients (APIs) relate to pharmaceutical substances having established medicinal and therapeutic applications. The subject goods are intended to be used as active pharmaceutical ingredients in the manufacture of pharmaceutical formulations and in certain cases for examination, testing, clinical research, bioavailability or bioequivalence studies. Thus, the subject goods possess the character of Bulk Drugs/APIs and are regulated as pharmaceutical substances.

7.10.2 Under Section 3(b) of the Drugs and Cosmetics Act, 1940, the definition of “drug” includes medicines and substances intended for use in the diagnosis, treatment, mitigation or prevention of disease or disorder in human beings or animals, as well as substances intended for use as components of a drug. Accordingly, Bulk Drugs/APIs intended for use as active ingredients in pharmaceutical formulations fall within the regulatory framework governing drugs and are prescribed under the said Act and the rules made thereunder. In the present case, the Applicant has submitted the relevant statutory licenses/approvals issued under the Drugs and Cosmetics regulatory framework in support of the nature and intended use of the subject goods.

7.10.3 Sl. No. 226 of Schedule I to Notification No. 09/2025-Integrated Tax (Rate) dated 17.09.2025 prescribes an IGST rate of 5% for “All Drugs and medicines including their salts and esters and diagnostic test kits; formulations manufactured from bulk drugs”, irrespective of classification under “30 or any Chapter”, subject to the exclusion specified therein. The entry is description-based and is not restricted merely to goods falling under Chapter 30. Therefore, Bulk Drugs/APIs having established medicinal use and falling within the scope of “drugs and medicines” are capable of being covered under the said entry, notwithstanding the fact that, on the basis of their individual chemical composition, they may be classifiable under Chapter 28 or Chapter 29 of the Customs Tariff. Further, the fact that such goods are imported in bulk form or as APIs does not, by itself, take them outside the scope of the specific description of “All Drugs and medicines”, where their pharmaceutical character and intended medicinal use are established from the documentary and regulatory approvals placed on record.

7.10.4 In view of the above discussion, I find that the subject Bulk Drugs/Active Pharmaceutical Ingredients (APIs), as described in the application and supported by the documents submitted by the Applicant, qualify as “Drugs and medicines” for the purpose of Sl. No. 226 of Schedule I to Notification No. 09/2025-Integrated Tax (Rate) dated 17.09.2025. Accordingly, the subject goods are eligible for the IGST rate of 5%, provided that the particular Bulk Drug/API is not covered under the exclusion specified in the said entry, including the goods specified at Sl. No. 113 of Notification No. 10/2025-Integrated Tax (Rate) dated 17.09.2025.

7.11 In view of the facts and circumstances, I observe as follows:

(a) The definition of “drug” under Section 3(b) of the Drugs and Cosmetics Act, 1940 is wide and inclusive in nature, and expressly covers substances intended for use as components of a drug. Active Pharmaceutical Ingredients (APIs)/bulk drugs, being pharmaceutical substances used as such or as ingredients in formulations, squarely fall within the ambit of the said definition subject to their intended use and compliance with the applicable statutory requirements.

(b) The language of Sl. No. 226 of Schedule I to Notification No. 9/2025-Integrated Tax (Rate) dated 17.09.2025 is broad and description-based. It covers “All Drugs and medicines…”, and expressly extends to goods falling under “Chapter 30 or any Chapter”. Therefore, the said entry is not restricted merely to finished pharmaceutical formulations falling under Chapter 30. Bulk Drugs/APIs having pharmaceutical character and intended medicinal use are capable of being covered by this entry, notwithstanding their classification under Chapter 28 or Chapter 29 of the Customs Tariff.

(c) The evidence on record, including the statutory licences/approvals and other documents submitted by the Applicant establishes that the subject goods are Bulk Drugs/Active Pharmaceutical Ingredients (APIs) intended for use in the manufacture of pharmaceutical formulations and, in certain cases, for examination, testing, clinical research, bioavailability or bioequivalence studies. The subject goods are not covered by the nil rate of IGST under the relevant provisions of Notification No. 10/2025-Integrated Tax (Rate), as examined from the material available on record. Accordingly, the subject goods are eligible for IGST at the rate of 5% under Sl. No. 226 of Schedule I to Notification No. 09/2025-Integrated Tax (Rate) dated 17.09.2025, subject to the conditions and exclusion specified therein.

7.12 In view of the foregoing discussion, the findings recorded and the legal provisions discussed above, I rule as under:

The subject Bulk Drugs/Active Pharmaceutical Ingredients (APIs), as described in the application and supported by the documents submitted by the Applicant, qualify as “All Drugs and medicines” under Sl. No. 226 of Schedule I to Notification No. 09/2025-Integrated Tax (Rate) dated 17.09.2025 and are eligible for the concessional IGST rate of 5%, provided that the particular Bulk Drug/API is not covered under the exclusion specified under the said entry, including the goods specified at Sl. No. 113 of Notification No. 10/2025-Integrated Tax (Rate) dated 17.09.2025.

7.13 In view of the answer to Question No. 1 being in the affirmative, Question No. 2 does not arise for consideration.

Ruling

I rule accordingly.