In re Intas Pharmaceuticals Limited (CAAR Mumbai)
Summary: The Customs Authority for Advance Rulings, Mumbai considered an application filed by Intas Pharmaceuticals Limited seeking an advance ruling on the applicable IGST rate for imports of bulk drugs/Active Pharmaceutical Ingredients (APIs). The application was received on 21.04.2026 under Section 28H(1) of the Customs Act, 1962. The applicant sought a ruling on whether IGST was leviable at 5% under Sl. 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 falling under Chapters 28 or 29 of the Customs Tariff.
Material Facts
Intas Pharmaceuticals Limited is a pharmaceutical company engaged in manufacturing and supplying pharmaceutical products. It imports bulk drugs, which are Active Pharmaceutical Ingredients used principally in manufacturing pharmaceutical formulations and, in certain cases, for testing, examination, analysis, clinical research, clinical trials, bioavailability studies and bioequivalence studies. The imported bulk drugs are generally classified under Chapters 28 or 29 of the Customs Tariff.
The applicant had been importing the relevant bulk drugs under a Form 10 licence and had been paying IGST at 18%. It contended that the correct rate was 5%. It also proposed future imports for clinical testing and related purposes under Form 11 and Form CT-17 licences.
Statutory Framework and Applicant’s Submission
Section 3(7) of the Customs Tariff Act, 1975 provides for levy of IGST on imported articles at the rate applicable under Section 5 of the IGST Act, 2017 to a like article supplied in India.
Sl. No. 226 of Schedule I to Notification No. 9/2025-Integrated Tax (Rate) covers:
- All drugs and medicines, including their salts and esters and diagnostic test kits; and
- Formulations manufactured from bulk drugs,
subject to the exclusion of goods covered at the nil rate under Sl. No. 113 of Notification No. 10/2025-Integrated Tax (Rate). Sl. No. 113 covers drugs or medicines listed in Annexure I.
The applicant contended that Sl. No. 226 applies irrespective of tariff classification because it covers goods falling under “Chapter 30 or any Chapter”. It further submitted that the expression “all drugs and medicines” includes bulk drugs/APIs. The applicant relied upon the definitions under the Drugs (Price Control) Order, 2013 and the Drugs and Cosmetics Act, 1940, particularly the definition of “drug” covering substances intended for use as components of a drug.
The applicant also submitted that the use of a semicolon in Sl. No. 226 separates “all drugs and medicines” from “formulations manufactured from bulk drugs”. According to the submission, restricting “all drugs and medicines” to finished formulations would make the separate reference to formulations manufactured from bulk drugs redundant.
The applicant relied upon judicial decisions and advance rulings which, according to it, treated bulk drugs as drugs. It also relied upon the CAAR Mumbai ruling issued to Cipla Limited on 17.03.2026, which had held that APIs/bulk drugs imported for further manufacture and clinical trials attracted 5% IGST under Sl. No. 226.
Treatment of APIs Used for Testing and Clinical Studies
The Authority considered whether APIs imported for clinical trials, bioavailability studies or bioequivalence studies would fall outside Sl. No. 226 merely because they were not intended for immediate therapeutic administration.
The Authority referred to Section 3(b) of the Drugs and Cosmetics Act, 1940 and the New Drugs and Clinical Trials Rules, 2019. It observed that the statutory framework treats drugs used in clinical trials, bioavailability studies and bioequivalence studies as drugs. The Authority further held that the essential character of an API as a pharmaceutical substance does not change merely because it is imported for such purposes.
Accordingly, APIs imported for clinical trials, bioavailability studies or bioequivalence studies were not excluded from Sl. No. 226 merely because of their intended use.
The Authority separately considered APIs imported under Form 11 for examination, test or analysis. It noted that Rule 33 of the Drugs and Cosmetics Rules, 1945 specifically provides for import of drugs for examination, test or analysis under Form 11. It therefore found that goods imported under Form 11 continue to retain their character as drugs and that their intended use for examination, testing or analysis does not exclude them from Sl. No. 226.
Specific Entry Versus General Entries
The Authority compared Sl. Nos. 35 and 36 of Schedule II, which cover all inorganic chemicals under Chapter 28 and all organic chemicals under Chapter 29, with Sl. No. 226.
It held that Sl. No. 35 and 36 are broad and generic entries, whereas Sl. No. 226 specifically covers “all drugs and medicines” without restricting the entry to a particular Chapter. Therefore, where APIs classified under Chapters 28 or 29 satisfy the description of drugs, the specific Sl. No. 226 entry prevails over the general chemical entries.
Nature of the IGST Rate Notification
The Authority also considered the nature of Notification No. 9/2025-Integrated Tax (Rate). It observed that the notification is a rate notification and not an exemption notification. Relying on the principle referred to in Commissioner of Customs (Import), Mumbai v. Dilip Kumar & Company, it held that the subject goods were appropriately covered under Sl. No. 226 as a taxing entry.
Findings
The Authority concluded that the definition of “drug” under Section 3(b) of the Drugs and Cosmetics Act, 1940 is wide and inclusive and expressly covers substances intended for use as components of a drug. It found that APIs/bulk drugs fall within that definition.
It further found that:
- Sl. No. 226 is broad and covers drugs under “Chapter 30 or any Chapter”, thereby encompassing APIs classifiable under Chapters 28 and 29.
- Sl. No. 226 is a specific entry and prevails over the general entries covering inorganic and organic chemicals.
- The character of APIs as drugs does not change merely because they are imported for clinical trials, bioavailability or bioequivalence studies.
- The regulatory framework under the Drugs and Cosmetics Act, 1940 and the relevant Rules recognises the subject goods as drugs irrespective of the specific purpose of import.
- APIs imported under Form 11 for examination, test or analysis also retain their character as drugs.
Final Ruling
The Authority concluded that bulk drugs/Active Pharmaceutical Ingredients (APIs), whether imported for manufacture of formulations or for testing, examination, analysis, clinical research, 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).
FULL TEXT OF THE ORDER OF CUSTOMS AUTHORITY OF ADVANCE RULING, MUMBAI
M/s Intas Pharmaceuticals Limited (having IEC No. 0896004341) (hereinafter referred to as ‘the applicant’, in short) filed application (CAAR-1) for, advance ruling before the Customs Authority for Advance Rulings. Mumbai (CAAR in short). The said application was received in the secretariat of the CAAR, Mumbai on 21.04.2026 along with enclosures in terms of Section.28H (1) of the Customs Act, 1962 (hereinafter referred to as the ‘Act’ also).
2. The Applicant has sought ruling in respect if following question(s):
i. Whether Integrated Goods and Services Tax (hereinafter referred to as “IGST”) is leviable @5% for the import of bulk drugs in terms of SI. No. 226 of Schedule I of Notification No. 9/2025-Central Tax (Rate) dated 17.09.2025 (hereinafter referred to as the IGST Rate Notification’)`?
ii. If not, then what is the correct rate of IGST leviable for the import of hulk drugs falling under chapter 28 or 29 of the Schedule to Customs Tariff Act, 1975′?
3. Submission by Applicant-
3.1 Intas Pharmaceuticals Limited is a pharmaceutical company incorporated in 31.05.1985. The Applicant is a leading manufacturer and supplier of pharmaceutical products.
3.2 Copy of certificate of incorporation of the Applicant Company is filed along with this application.
3.3 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 formulations i.e. dosage form of drug and occasionally for testing/analysis, clinical research and I3ioequivalence study. These imported ingredients, which are active ingredients for medicines, are hereinafter collectively referred to as “bulk drugs”.
3.4 Bulk drugs are classified under Chapter 28 or Chapter 29 as they are organic and inorganic chemicals.
3.5 The present application pertains to determination of IGST payable on the import of these hulk drugs. The relevant portion from the of 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 Sl. No. 113 of Notification No. 10/2025-Integrated Tax (Rate) dated 17th September, 2025. |
3.6 SI. No. 113 of Notification No. 10/2025-Integrated Tax (Rate) dated 17th September, 2025 is extracted below:
| Si. No. | Chapter/Heading/Sub- heading/Tariff item | Description of goods |
| 113. | 30 or any Chapter | Drugs or medicines listed in Annexure I |
3.7 The above is the entry applicable for IGST at NIL rate. The products for which the present ruling is sought arc not covered under Annexure 1, therefore the-same is not applicable in the present case.
3.8 The bulk drugs in question for manufacturing final formulations are imported after procuring the following licence under the Drugs and Cosmetics Act, 1940 (and Rules):
| Form .No. License No. | Title of License Issued | Illustrative Copy enclosed herewith as “Exhibit-II” |
| Form 10 | License to import drugs (excluding those specified in Schedule X) to the Drugs And Cosmetics Rules, 1945 | License No. II ,/13D-016056 RC/I3D-002807 |
3.9 The Applicant has been importing the Bulk Drugs/API in question under Form 10 license and has been discharging IGST @18%. However, the Applicant is of the view that IGST is payable correctly @,5% only. Accordingly, the present application is being made.
3.10 The Applicant also plans to import bulk drugs for clinical testing in the future under the following license:
| Form No. License No. | Title of License |
| Form 11 | Licence to import drugs for the purposes of examination, test or analysis |
| Form CT-17 | License to Import New Drug or Investigational New Drug for the purpose of Clinical Trials or I3ioavailability or 13ioequivalence study or for examination, test and analysis |
4. Applicants’ interpretation of Law:-
4.1 APPLICANT’S ELIGIBLITY FOR ADVANCE RULING
4.1.1 In order to file an application before the Authority for Advance Ruling, the Applicant must satisfy the conditions prescribed under the Customs Act, 1962 (hereinafter referred to as ‘Customs Act’).
4.1.2 Provisions relating to Advance Ruling are prescribed under Chapter V13 of the Customs Act.
Clause (c) of Section 28E of the Customs Act defines an “Applicant” as:
In this chapter, unless the context otherwise requires, (c) “applicant’ means-
(i) holding a valid Importer-exporter Code Number granted under section 7 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1.992);
(Emphasis Supplied)
4.1.3 The Applicant herein. has been granted a valid Importer porter Code Number (IEC) under Section 7 of the Foreign Trade (Development and Regulation) Act, 1992. The same is 0896004341.
Clause (b) o Section 28.E of the Customs Act defines ‘advance ruling’ as.:
(b) “advance ruling” means a written decision on any of the questions referred to in section 2811 raised by the applicant in his application in respect of any. goods prior to its importation or exportation;
(Emphasis Supplied)
4.1.4 The questions on which an application for an advance ruling can be made have been provided under Section 2811 of the Customs Act. As per the said Section 2811 (2) of the Customs Act, an applicant may make an application for advance ruling in respect of questions relating to:
(a) applicability of notification issued in respect of duties under the Customs Act, 1962, the Customs Tariff Act, 1975 and any duty chargeable under any other law for the time being in force in the same manner as duty of Customs leviable under the Customs Act-
(Emphasis Supplied)
4.1.5 The present application is being made by the Applicant to confirm the levy of IGST which is levied on the imported goods under Section 3 (7) of the Customs Tariff Act, 1975.
Non-Applicability of Bar under Section 281
Section 281 of the Customs Act, 1962 is set out below:
“SECTION 28-I. Procedure on receipt of application. (1) On receipt of an application, the Authority shall cause a copy thereof to be forwarded to the [Principal Commissioner of Customs or Commissioner of Customs] and, if necessary, call upon him to furnish the relevant records : Provided that where any records have been called for by the Authority in any case, such records shall, as soon as possible, be returned to the [Principal Commission Customs or Commissioner of Customs].
(2) The Authority may, after examining the application and the records called for, by order, either allow or reject the application :
Provided that the Authority shall not allow the application where the question raised in the application is –
(a) already pending in the applicant’s case before any officer of customs, the Appellate Tribunal, or any Court;
(b) the same as in a matter already decided by the Appellate Tribunal or any Court : Provided further that no application shall be rejected under this sub-section unless an opportunity has been given to the applicant of being heard :
Provided also that where the application is rejected, reasons for such rejection shall be given in the order.”
4.1.6 Thus, the conditions set out in Section 281 are satisfied as:
a. the question raised in the present application regarding the rate of IGST for import of bulk drugs is not pending in the Applicant’s own case before any officer of customs, the Appellate Tribunal, or any Court;
b. the question raised in the present application regarding the rate of IGST for import of bulk drugs is not a matter already decided by the Appellate Tribunal or any Court
4.1.7 Therefore, it flows that in the present case, the Applicant satisfies all the criteria required for filing the application for advance ruling, namely:
(a) The Applicant has been granted a valid Importer-Exporter Code Number (IFC) under section 7 of the Foreign Trade (Development and Regulation) Act, 1992;
(b) The Applicant is filing the Application in respect of goods prior to their importation into India;
(c) The application for advance ruling is in relation to clause (a) of Section 2811 (2) of the Customs Act, 1962; and •
(d) The application is not barred under Section 281 of the Customs Act, 1962.
4.1.8 Thus, the present application must be allowed to be proceeded with.
4.2 QUESTION OF LEVY OF IGST ON THE IMPORT OF BULK DRUGS
4.2.1 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 Mx Act, 2017 on a like article on its supply in India, on the value of the imported article. as. determined under sub-section (8)8[or sub-section (8A), as the case may be.”
4.2.2 IGST Rates arc notified vide Notification No.• 9/2025-Integrated Tax (Rate). The relevant portion of Schedule I (5%) to the IGST Rate Notification is extracted below:
| Si. 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] |
4.2.3 SI. No. 113 of Notification No. 10/2025-Integrated Tax (Rate) dated 17.09.2025 is extracted below:
| SI. No. . | Chapter/Heading/Sub- heading/Tariff item | Description of goods |
| 113. | 30 or any Chapter | Drugs or medicines listed in Annexure I |
4.2.4 The above is the entry applicable for IGST at NIL rate. The products for which the present ruling is sought arc not covered under Annexure I, therefore the same is not applicable in the present case.
4.2.5 The Applicant submits that on import of bulk drugs, IGST @ 5% alone is applicable under the above extracted Si. No. 226 of Schedule .1 of Notification No. 9/2025:Integrated. Tax (Rate).
4.2.6 For 5% IGST to be applicable, the imports should satisfy the following conditions:
a. Be classified under Chapter 30 or any other Chapter;
b. Be Drugs or medicines ; and
c. Not be covered under SI. No. 113 of Notification No. 10/2025-Integrated Tax (Rate) dated 17.09.2025
4.2.7 The bulk drugs in. question satisfy all 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.
4.2.8 As per SI. 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 arc 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 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 literature, it is clear that the term “All Drugs and medicines” is inclusive of hulk drugs and hence, levy of IGST in terms of Sl. No. 226 of Schedule Ito the Notification shall apply to bulk drugs.
4.2.9 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;
***
“(i) 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 fbr or in the diagnosis, treatment, mitigation or prevention of disease and, but shall not include
(i) any medicine included in any bonafide Ayurvedic (including Sidha) or Unani (Tibb) systems of medicines; •
(ii) any medicine included in the Homeopathic system of medicine; and
(iii) any substance to which the provisions of the Drugs and Cosmetics Act,. 1940 (23 of 1940) do. not apply; “
…(emphasis supplied)
4.2.10 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;1
(ii) such substances (other than food) intended to affect the structure or any function of the human body or intended to be used fbr the destruction of vermin or insects which cause disease in human beings or aniinals,.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 he specified from time to time by Central Government by .notification in the Official. Gazette, after consultation. with the Board;
…(emphasis supplied)
4.2.11 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 that, “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.
4.2.12 Furthermore, under the Drugs and Cosmetics Act and Rules, for import of a bulk drug, the importer needs to procedure numerous licenses and registrations which are applicable to drugs. That is, for purpose of licensing under the Drop laws of India, bulk drugs arc treated as drugs only. This is evident from the following licenses/ registrations issued to the Applicant or proposed to be obtained for import of bulk drugs:
| Form / Licence / Registration | Section / Provision | Relevant Extracts from the Section / Provision |
| Form 10 (Rule 23 of the Drugs and Cosmetic 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 import of drugs specified in Schedule X. |
| Form 11 (Rule 33 of the Drugs and Cosmetic Rules, 1945) | Rule 33 – Import of drugs for examination, test or analysis | Small quantities of drugs, the import of which is otherwise prohibited under section 10 of the Act, may be imported for the purpose of examination, test or analysis subject to specified conditions: (a) no drug shall be imported for such purpose except under a licence in Form 11; *** |
| Form CT-17 (Rules 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 | Grant of licence for import of new drug or investigational new drug for clinical trial or bioequivalence study or for examination, test and analysis. |
4.2.13 There is no definition of “bulk drug” in the Drugs and Cosmetics Act, 1940. The fact that the Drugs and Cosmetics Act, 1940 does not differently define bulk drugs, and does not make a distinction between bulk drugs and drugs for final consumption, entails that the two are treated at par only.
4.2.14 C131C has reiterated time and again that when it comes to import of Drugs and Medicines, the provisions of the Drugs & Cosmetics Law and the Licenses/Registrations issued by CDSCO must be considered even for interpretation Tax provisions. This is evident from the following Circulars/Communications issued by CDSCO:
a. Letter F. No. 450/8/2007-Cus. dated 22-1-2007
b. Instruction F. No. 450/11/2011-Cus. IV, dated 25-2-2011
c. Circular No. 10/2016-Cus., dated 15-3-2016
d. Circular No. 28/2016-Cus., dated 14-6-2016
e. C. B.I. & C. Circular No. 44/2018-Cus., dated 13-11-2018
4.2.15 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, bulks drugs are “Drugs”
4.2.16 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. The relevant portions are extracted below:
4.2.16A 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
4.2.17 It is submitted that there is plethora of decisions that hold that the term “drugs” is inclusive of “bulk drugs”. The Tribunal in Burroughs Welcome (I) Ltd vs commissioner of C Ev. and Cus., Mumbai [2007 (216) E.L.T. 522 (Tri-Mum)J, in the context of exemption benefit for life saving drugs, 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.
4.2.18 The definition of “drugs” under the erstwhile Drugs (Prices Control) Order, 1995 was as below:
“(1) “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_ or 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; “
4.2.19 Relying on the above-mentioned decision and the definition of drugs (extracted above), 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 arc defined as such under the Drugs (Prices Control) Order, 1995 also. For this purpose, the Tribunal referred to and relied upon the decision of Tribunal, Mumbai Bench, in the case of Burroughs Welcome (India) Limited, referred. above. Relevant portion of the above decision reads as Under:
“4. Burroughs Welcome /I) Ltd. had imported Polymyxin B Sulphate and used the same along with some other ingredients in the manufacture of Neosporin. Al/s. Pfizer Ltd. had imported Cefoperazone Sodium and used the same for manufacture,. of Cefoperazone Sodium Injections. The issue before the, Tribunal was whether the above parties .were eligible for the benefit of exemption from payment of CVD on the items imported, by them, under Sl. No. 43 (A) of Notification No. 11 /97CE and under the corresponding entries. of successor Notifications. It was not in dispute that the imported items figured in List 2 appended to Sl. No. 43 (A) of the above Notification. While the Revenue classified the goods as ‘bulk drugs’ under SI. No. 43(13), the assessees classified them as life saving drugs under Sl. No. 43 (A). ‘The Tribunal accepted the assessees contention and held that the drugs imported by them were to be categorized under Si. No. 43(A) inasmuch as they found mention in List 2. It was further held that, as S1 No. 43 (A) was more beneficial than 43 (B), the assessee was not precluded from claiming such benefit at a later stage. It is settled law that, where two exemption Notifications are applicable to a given goods which is otherwise chargeable to duty, the assessee is entitled to avail the benefit of that Notification which is more beneficial vide Indian Oil Corporation Ltd. v. CCE – 1991 (53) 347 (Tribunal), CCE v. Indian Petrochemicals 1997 (92) E. L.7: 13 (S.C.) and H.C.L. Ltd. v. CC – 2001 (130) E.L.T. 405 (S.C.). Applying the same principle, we hold the view that, if two entries in an Exemption Notification are applicable to a given goods, the assessee can legitimately sfailli under the more advantageous entry. Therefore, we are inclined to follow, with approval, the view taken by the co-ordinate Bench in the case of Burroughs Welcome (I) Ltd .& Pfizer Ltd.
5. In the instant case, admittedly, the ‘bulk drugs’ imported by the appellants were specifically mentioned in List 3 appended to Si. No. 80(A) of Customs Notification No. 21/02 and are liable to be considered as ‘drugs’ mentioned at 80(A). It is beyond doubt that ‘bulk drugs’ are also ‘drugs. ‘ They are so defined under the Drugs (Prices Control) Order, 1995 also. The imported goods, which are specified in List 3, must fall within the coverage of ‘drugs specified in List 3’ and consequently the benefit of Sl. No. 80(A) would be admissible to them in relation to BCD. It would follow that, insofar as CVD is concerned, the benefit of Sl. No. 47(A) of the Central Excise Notification would be available to the goods. We have taken this view upon strict interpretation of the language used in the description of goods under the relevant entries of the Notification, in terms of the Apex Court’s ruling in Gujarat State Fertilisers Co. v. CCE – 1997 (91) E.L.T 3 (S.C.) and other cases cited by learned DR. In the result, all the appeals filed against the appellate Commissioner’s order on merits are bound to succeed.
4.2.20 The aforesaid decisions were followed by the Tribunal in Astrix Laboratories Ltd. v. CCE & Cus., Hyderabad-I [2009 (233) E.L.T. 372 (TH. – Bang.)J [Refer Para 5, 5.1 and 5.21.
4.2.21 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, as extracted below:
“(2) All other words and expressions used herein and not defined but defined in the Act or the Drugs and Cosmetics Act, 1940 (23 of 1940) shall have the meanings respectively assigned to them in the said Acts.”
4.2.22 Thus, in the absence of the definition of “drugs” under the current Drugs (Prices Control) Order 2013; reference is made to 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 arc to be treated as drugs only.
4.2.23 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 decision in Aurobindo Pharma Ltd. v. CCE, Hyderabad-I [2009 (247) E.L.T. 206 (Tri. – Bang.)[, wherein it was held that when the notification does not distinguish between bulk drugs, drugs or medicines, then exemption is to be granted is to bulk drugs as well.
4. 2. 24 Further, reference is also Madero the recent decision of the Hon’ble CESTAT, Ahmedabad in the case of Shri Baser v. CCEx & St — 2024 (12) TMI 270 wherein reliance was placed on the decisions of Cipla Ltd (supra) and Hetero Drugs Ltd. v. CC (Airport) —2017 (9) TMI 1275-CESTAT Chennai to hold that drugs and bulk drugs arc one and the same. Thus, the exemption: benefit under SI. No. 108(4) of Notification No..12/2012-Cus dated- 17.03.2012 was extended to the alleged bulk drugs imported by the Company. The relevant portion of the said decision is extracted hereunder:
“4. I On examination of the case on merit of Ails Stirling Biotech Ltd, we ‘find that the dispute is on the exemption entry of the goods in question whether the same would fall under description (A) or (B) of Sr. No. 108 of Notification No. 12/2012-CUS. We find that description (A) grants exemption to drugs and medicines specified in the list No. 3 and 4 of Customs exemption Notification 12/2012-Cus and description (B) provides exemption. to bulk drugs used in the manufacture of goods mentioned at (A). The point of dispute is. only that whether the drug mentioned at description (A) covers the .bulk drugs manufactured by the appellant namely Idarubicin hydrochloric acid, Doxorubicin hydrochloric acid, Daunorubicin hydrochloric acid, Epirubicin hydrochloric acid, Zoledronic Acid. This ,issue has been considered in various judgments. which ore given below:-
(a) In the case of Cipla Ltd (Supra), Tribunal Chennai has given the following, findings:
……
(b) In the case of Hetero. Drugs Ltd (Supra), this Tribunal has considering the same issue whether the bulk drug and drug is same or otherwise. The relevant part of the order is reproduced below.––
From the above judgments, it is clear that drugs and bulk drugs are one and the same, Therefore, the • company -M/s. Sterlling Biotech Ltd was entitled for exemption. Notification I2/2012-CUS entry Sr. No. 108 description (A) which does not involve any condition such as following the procedure of Central Excise (removal of goods at concessional rate of duty for manufacture of excisable goods) Rules, 2001. Therefore, entire basis of the department that such procedure was not followed is not relevant.. Since, the duty demand itself is not prima facie sustainable on the company, there is no question of imposing personal penalty on the employee of M/s. Sterlling Biotech Ltd. who is the appellant herein.”
(Emphasis supplied)
4.2.25 It is pertinent to note that in the Applicant’s own case vide Order No. 105/2018-19/Commr/NS-I/JNCH dated 06.02.2019 it has been held that ‘drugs’ includes ‘bulk drugs’, and on that ground BCD exemption was extended to the Applicant. Copy of the Order is enclosed as ‘Exhibit — B’.
4.2.26 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 to be redundant
4.2.27 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.
4.2.28 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.
4.2.29 Reliance is placed on the Tribunal decision of hart and Co. v. Collector of Customs, 1991 (53) E.L.T. 336, 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. Hari and Co., 1997 (96) E.L.T. 503 (S.C.). Reference is also made to the Tribunal’s decision in Heildelberg Cement (India) Ltd. v. Conunr. of C. Ex., Nagpur & Raigud, 2015 (315) E.L.T. 53 (Tri. – Mumhai), wherein it was held clauses separated by a semi-colon are to be read disjunctively and not conjunctively.
4.2.30 From the fact that (d) “formulations manufactured from bulk drugs”, arc mentioned separately, it can be inferred that (a) “all drugs and medicines” intends to cover ‘bulk drugs’ only, while (d) covers the formulations, drugs and medicines which are manufactured from such bulk drugs. If (a) and (d) were intended to mean the same, i.e. that only drugs and medicines for final consumption are covered under the entry, then it would render (a) to be redundant, as (d) already Covers such final formulations (often classified under Chapter 30).
4.2.31 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.
4.2.32 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, 2011 (269) E.L.T. 145 (S.C.). The relevant portion is extracted below:
“It is a. settled principle of law that the words used in the section, rule or notification should not be rendered redundant and should he given effect to. It is also one of the cardinal principles of interpretation of any statue that some meaning must be given to the words used in the section. Expression “Wire rods and wires” which is mentioned in item no. (xv)would. not and cannot cover the expression “tools, alloy and special steels” of entry; (ix) nor it would refer to the expression “Iron and Steel” as each item used in entry nos. (ix) and (xv) are independent items not depending on each other at all as has been held in the case of Pare La! Mehrotra (supra).”
4.2.33 The Hon’ble High Court in TVL. Transtonnelstroy Afeous Joint Venture y. .1.101, 2020 (43) G.S.7:1,. 433 (Mad.) (para 41), it was 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.
4.2.34 Reliance is also placed on the decision of Printers (Mysore) Ltd. Vs. Asstt. Commercial Tax Officer – 1994 (2) SCC 434. The relevant extract of the said judgement is as follows: “Even apart ‘from, the opening words in Section 2 referred to above, it is well settled that where the context does not permit or where it would lead to absurd or unintended result, the definition of an expression need not be mechanically applied. [Vide T.M. Kanniyan v. Income Tax Officer, Pondicherry and Anr. 1968 20 S.C.R. 103, Pushpa Devi and Ors. v. Milkhi Ram (Dead) by his L.Rs. MANU/SC/0149/1990 :
[1990I1SCR278 I para 141 and Commissioner of Income Tax, Bangalore v. Gotla, Yadagiri MANI I/SC/0126/1985: [1985.11561TR323(SC)
4.2.35 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/analysis, clinical research and bioequivalence study’ also fall under the ambit of ‘cb:Lgz.s’ and are leviable with IGST @5%
4.2.36 The relevant definitions from the Drugs and Cosmetic Rules, 1945 arc 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 ;1
(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 maybe 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 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;
4.2.37 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 arc extracted below:
2. Definitions.—–(1) In these rules, unless the context otherwise requires.
***
(e) “bioavailability study” means a study to assess the rate and extent to which the drug is absorbed from a pharmaceutical formulation and becomes available in the systemic circulation or availability of the drug at the site of action;
(f) “bioequivalence study” means a study to establish the absence of a statistically significant difference in the rate and extent of absorption of an active ingredient from a pharmaceutical formulation in comparison to the reference firmulation having the same active ingredient when administered in the same molar dose under similar conditions
***
(j) “clinical trial” in relation to a new drug or investigational new drug means any systematic study of such new drug or investigational new drug in human subjects to generate data for discovering or verifying its,-
(i) clinical or;
(ii) pharmacological including pharmacodynamics, pharmacokinetics or;
(iii) adverse effects,
(iv) with the objective of determining the safety, efficacy or tolerance of such new drug or investigational new drug; “
4.2.38 It is submitted that from a combined reading of the definitions of ‘drugs’, ‘bioavailability study’, ‘bioequivalence- study’ and ‘clinical trials’, it is clear that drugs covers even those products which are for bioavailability or bioavailability studies, or clinical trials or test/analysis purpose.
4.2.39 It is submitted that the definitions of bioavailability study, bioavailability studies and clinical trials would be rendered redundant if the definition of ‘drugs’ itself was construed to not cover the drugs which arc intended for such purposes.
4.2.40 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 SI, 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 subject to levy under No. 226 of Schedule I, and not under Si, 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
4.2.41 Si. No. 35 and 36 of Schedule II to the IGST Rate Notification cover goods of Chapter 28 and 29 respectively. The relevant portion of the notification is extracted below:
| SI. No. | Chapter/Heading/Sub- heading/Tariff item | Description of goods |
| 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 |
4.2.42 SI. NQ. 226 of Schedule to the IGST Rate Notification is extracted again for reference:
| SI. 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] |
4.2.43 Furthermore, it is submitted that Si. No. 226 of Schedule I is a more specific entry as opposed to the generic entry of SI. No. 35 or 36 of Schedule II, and thus the specific entry would prevail.
4.2.44 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, 2025 (7) TMI 229 — CESTAT New Delhi. The relevant portion of the decision is extracted below:
“The Principal Commissioner, however, in paragraph 43 of the impugned order considered the IGST Rate Notification as an Exemption Notification and observed that the benefit of the IGST Rate Notification should be interpreted strictly and the burden to prove applicability would rest upon the tax payer and that the benefit of any ambiguity in the Notification must be interpreted in favour of the Revenue. The Principal Commissioner committed an error in assuming that the IGST Rate Notification is an Exemption Notification. The IGST Rate Notification is at rate Notification and, therefore, a Mxing Notification. h has to be strictly construed and any ambiguity has to be interpreted in favour of the tax payer and against the Revenue as was observed by the Supreme Court in Safari Retreats.”
4.2.45 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 Cus. (Import), Murnhai v. Dilip Kumar & Company, 2018 (361) E.L.T. 577 (S.C.), whereby it established the principle that in case of an ambiguity in a taxing statute and where two interpretations can be adopted, then the benefit of interpretation is to be given to the assessee. It is only in the case of an exemption italicization that it should be interpreted in favour of the Revenue. IGST Notification is a taxing statute and not an exemption notification. Thus, even on applying the decision of Dilip Kumar the interpretation should be in favour of the Applicant.
Few Advance Rulings on this issue
Customs Advance Ruling issued to CII’LA on identical issue
4.2.46 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 SI. 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
4.2.47 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 SI. Nos. therein which were relevant to Drugs are extracted below:
| SI. No. | Chapter/Heading/Sub- heading/Tariff item | Description of goods |
| 180. | 30 or any Chapter | Drugs or medicines including their salts and esters and diagnostic test kits, specified in List I appended to this Schedule. |
| 1. | 30 | Formulations manufactured from the bulk drugs specified in List 2 appended to this Schedule. |
4.2.48 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 SI. No. 180 above includes “bulk drugs–. 3 of them are in favour of the Applicant and 2 arc against. The same are analysed below:
| Sl. No. | Ruling reference | Ratio | Whether Applicable in the present case |
| 1 | In Re: Laurus Labs Ltd., 2018 (13) G.S.T.L. 472 (A.A.R. – GST) Enclosed as ‘Exhibit – D’. | • “Drugs” includes bulk drugs. • The entry is a specific entry which will prevail over the general entry of “all organic chemicals other than gibberellic acid”. | Squarely applicable as the decision examines the levy for bulk drugs in light of the entry for Chapter 29. |
| 2 | Re: Biocon Ltd., 2020 (43) G.S.T.L. 281 (App. A.A.R. – GST – Kar.) Enclosed as ‘Exhibit – E’. | • “Drugs” includes bulk drugs by relying on the definition under the Drugs (Prices Control) Order, 1995. • Customs Tariff provides a similar concessional rate of 5% (by way of exemption notification), and bulk drugs used in the manufacture of drugs are also covered. • Customs Notification is worded in the same manner as examined the definition of “drugs”. | Squarely applicable in the present case, as it has examined the definition of “drugs”. |
| 3 | In Re: Sterling Biotech Ltd., 2021 (1) TMI 372 – AAR, Gujarat Enclosed as ‘Exhibit – F’. | • Only medicines and drugs are covered under the entry.• Bulk drugs are raw materials and cannot be directly administered to a human being.• The concessional rate of GST is applicable only to medicine or drugs which are ready for administering in the human being or person.• The word “Bulk Drugs” would have been included in the entry had the Government intended to extend the benefit of concessional rate to bulk drugs/raw material. | The rulings are not applicable in the present case as they have not considered the complete definition of “drugs”. They have only considered clause (i) and have not considered clause (iii) (refer para 18 in Sterling Decision and para 11 in Altis decision).Furthermore, the rulings have failed to take into consideration the previous decisions and rulings on the interpretation wherein “Drugs” was time and again held to include bulk drugs. |
| 4 | In Re: M/s. Altis Finechem Pvt. Ltd., 2021 (1) TMI 564 – AAR, GujaratAdvance Ruling No. GUJ/GAAR/R/61/2020Enclosed as ‘Exhibit – G’. | • Only medicines and drugs are covered under the entry.• Bulk drugs are raw materials and cannot be directly administered to a human being.• The concessional rate of GST is applicable only to the medicine or drugs which are ready for administering in the human being or person.• The word “Bulk Drugs” would have been included in the entry had the intention of the Government been to extend the benefit of concessional rate to bulk drugs/raw material. | The rulings are not applicable in the present case as they have not considered the complete definition of “drugs”. They have only considered clause (i) and have not considered clause (iii) (refer para 18 in Sterling Decision and para 11 in Altis decision).Furthermore, the rulings have failed to take into consideration the previous decisions and rulings on the interpretation wherein “Drugs” was time and again held to include bulk drugs. |
4.2.49 The above Rulings are not pertaining to the present legal position. Thus, they are not strictly applicable to the present Application. However, in the interest of completion of information, the above Rulings have been highlighted to the Hon’ble Authority.
4.2.50 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 Allis on the ground that the complete definition of “drugs” was not considered by these Rulings.
4.2.51 Thus, the above recent developments support the Applicant’s present application in support of payment of 5% GST on imports of AP1s/Bulk Drugs.
Condition Not be covered under Si. No. 113 of Notification No. 10/2025-Intezrated Tax (Rate) dated 17.09.2025.
4.2.52 SI. 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 SI. No. 113, by virtue of not falling under Annexure Ito that notification. Therefore, condition iii is also met.
4.2.53 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 S. No. 226 of Schedule Ito the 1GST 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 from 0/o the Office of the Principal Commissioner of Customs (Imports), Jawaharlal Nehru Customs House (‘.INCI I”), Nhava Sheva-1 Taluka-Uran, Raigad, Maharashtra, O/o the Commissioner of Customs, Customs House Mundra, Port User Building, Mundra Port, Kutch, Gujrat and O/o the Commissioner of Customs(Import), Air Cargo Complex, Sahar, Andheri East, Mumbai.
The application was forwarded to the jurisdiction of O/o the Office of the Principal Commissioner of Customs (Imports), Jawaharlal Nehru Customs I louse ONCE I’), Nhava Sheva-I Taluka-Uran; Raigad, Maharashtra, for comments on 20.04.2026, 14.05.2026 and 01.06.2026, 0/o the Commissioner of Customs, Customs I louse Mundra,. Port User Building, Mundra Port, Kutch, Gujrat on 28.04.2026 and 18.05.2026 and O/o the Commissioner of Customs(Import), Air Cargo Complex, Sahar, Andheri East, Mumbai on 28.04.2026 and 18.05.2026. However, no comments were received from the said Commissionerate.
6. Details of Personal Hearing
A personal hearing in this matter was conducted on 09.06.2026 at 4:20 pm. Representative explained a few Active Pharma Ingredient & I3ulk Ingredient arc drug with definition of Drug and Cosmetic Act, 1940 and how their products are eligible for 5% IGST. They also provided copy of earlier Advance Ruling issued by previous authority in similar matters. No one appeared from department.
7. Discussion and Findings
7.1 I have carefully considered the application filed by Intas Pharmaceutical limited, the written and additional submissions made by the Applicant, and the records placed before me.
7.2 – At the outset, I find that the issue raised in the question in the form CAAR-1 is squarely covered under Section 281-1(2) of the Customs Act, 1962, being a matter related applicability of duty (IGST rate in the present ease) under the provisions of this Act. The question posed for advance ruling is:
“Whether Integrated Goods and Services Tax (IGS1) is leviable @ 5% on import of bulk. drugs (Active Pharmaceutical Ingredients –APIs) in terms of Sl. No. 226 of Schedule I to Notification No.-9/2025-Integrated ‘Pak (Rate) dated 17.09.2025″
7,3 Statutory Framework
7.3.1 In terms of Section 3(7) of the Customs Tariff Act, 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. SI. No. 226 of Schedule 1 (5%) reads as under: –
| SI. No. | Chapter/Heading/S ub-heading/Tariff item | Description of goods |
| 226. | 30 or any Chapter | AII 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, 20251 |
I observe that form the perusal of the above entry it is clear SI. No. 226 of Schedule I (5%) 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.
7.3.3 SI. 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:
| Sl. No. | Chapter/Heading/Sub- heading/Tariff item | Description of goods |
| 113. | 30 or any Chapter | Drugs or medicines listed in Annexure I |
The applicant has submitted that the products to be imported in the present ruling are other than 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. As stated in the application, such APIs are intended for used:
(i) in the manufacture of pharmaceutical formulations; and
(ii) in certain cases, for testing, examination, analysis, clinical research, clinical trials, bioavailability studies and bioequivalence studies.
7.4.2 The Applicant has submitted that the bulk drugs presently under consideration are imported after obtaining the requisite licences under the Drugs and Cosmetics Act, 1940 and the rules framed thereunder. ‘I’he Applicant is presently importing the subject APIs under Form 10 Licence No. IL/BD-016056 12C/13D-002807, issued under the Drugs and Cosmetics Rules, 1945 for import of drugs (excluding those specified in Schedule X). The Applicant has stated that imports of the subject bulk drugs have been undertaken under the said Form 10 licence.
7.4.3 The Applicant has further submitted that it also proposes to import bulk drugs for clinical testing and related purposes in future under licences such as:
(a) Form 11, prescribed under Rule 33 of the Drugs and Cosmetics Rules, 1945 for import of drugs for examination, test or analysis; and
(b) Form CT-17, prescribed under the New Drugs and Clinical Trials Rules, 2019 for import of a new drug or investigational new drug for clinical trials, bioavailability studies, bioequivalence studies, examination, test or analysis.
7.4.4 Thus, the material placed on record shows that the subject APIs are imported, or proposed to be imported, under the regulatory framework administered by the Central Drugs Standard Control Organisation (CDS.00) as drugs governed by the Drugs and Cosmetics Act, 1940 and the rules framed thereunder.
7.4.5 I further note that Rule 33 of the Drugs and Cosmetics Rules, 1945 specifically deals with “Import of drugs for examination, test or analysis.” The Rule provides that small quantities of drugs, the import of which is otherwise prohibited under Section 10 of the Drugs and Cosmetics Act, 1940, may be imported for examination, test or analysis subject to prescribed conditions and only under a licence in Form 11. Therefore, the statutory scheme itself recognises the goods covered. thereunder as drugs and regulates their import accordingly. The grant of a Form 11 licence is predicated upon the goods possessing the character of drugs under the Drugs and Cosmetics Act, 1940 and not upon their intended end-use. Consequently, the fact that an API or bulk drug is imported for examination, testing or analysis does not alter its essential character as a drug.
7.4.6 This assumes significance in the present proceedings because the Applicant has submitted that certain. APIs may be imported in future under Form 11, for examination, test or analysis and under Form CT-17 for clinical trials, bioavailability studies, bioequivalence studies examination, test or analysis. The regulatory framework does not create. a separate category of goods distinct from drugs merely because the import is undertaken for research, testing, analytical, developmental or clinical purposes. Rather, both Rule 33 of the Drugs and Cosmetics Rules, 1945 and the provisions governing Form CT-17.proceed on the basis that the goods continue to be drugs and, therefore require specific regulatory authorisation for such specialised purposes. Accordingly, APIs imported under Form 11 or Form CT-17 remain drugs for the purposes of interpretation of Serial No. 226 of Schedule 1 to Notification No. 09/2025-Integrated Tax (Rate).
7.4.7 Further, the Applicant has submitted that there is no dispute regarding the tariff classification of the subject APIs under Chapter 28 or Chapter 29 of the Customs Tariff. The question raised in the present application is also not one of tariff classification but is confined to the determination of the applicable rate of integrated Goods and Services Tax on the import of such bulk drugs.
7.5 As discussed at para 11.3 above SI. No. 226 of Schedule I (5%) 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 SI. No. 226 being drugs. Therefore, it is to be analysed:
“Whether “Bulk Drugs/APIs” arc covered under the expression “All Drugs and Medicines” or otherwise” •
7.5.1 The expression ‘clrugs”. 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 produded as below:
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.
From the above definition of drugs it is evident that drugs covers:
-
-
- 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 Active Pharmaceutical Ingredients (APIs) are substances used as components of a drug. They are regulated under the Drugs and Cosmetics Act and require statutory licences for import APIs. There fore , APIs appear to fall within the ambit of “drug” under Section 3021
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:
“(b) “active pharmaceutical ingredients or hulk drug” means any pharmaceutical, chemical, biological or plant product including its salts, esters, isomers, analogues and derivations, confirming 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;
***
“(i) ‘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 Homeopathic system of medicine; and
(iii) tiny substances 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”.
7.5.6 The above conclusion is further reinforced by the regulatory licences relied upon by the Applicant. Form 10 is issued for import of drugs, Form 11 is issued for import of drugs for examination, test or analysis, and Form CT-17 is issued for import of a new drug or investigational new drug for clinical trials, bioavailability studies, bioequivalence studies, examination, test or analysis. Therefore, whether the API is imported fbr manufacture of formulations, examination, testing, analysis, clinical trials, bioavailability studies or bioequivalence studies, the regulatory framework consistently treats the imported goods as “drugs”
7.5.7 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 R.ulcs,.2019 are extracted below:
“2. Definitions. — (1) In these rules, unless the context otherwise requires,
***
(e).‘ “bioavailability study”. means a study to assess the rate and extent to which the drug is absorbed from a pharmaceutical formulation and becomes available in the systemic circulation or availability of the drug at the site of action;
(f) “bioequivalence study” means a study to establish the absence of a statistically significant difference in the rate and extent of absorption of an active ingredient ..from a pharmaceutical formulation in comparison to the reference formulation having the same active ingredient when administered in the same molar dose under similar conditions
***
(j) “clinical trial” in relation to a new drug or investigational new drug means– any systematic study of such new drug or investigational new drug in human subjects to generate data for discovering or verifying its, –
(i) clinical or;
(ii) pharmacological including pharmacodynamics. pharmacokinetics or;
(iii) adverse effects,
(iv) with the objective of determining the safety, efficacy or tolerance of such new drug or investigational new drug; “
7.5.8 I observe that a combined reading of the definitions of “drugs”bioavailability study”, “‘bioavdlability ” 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 API is 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 Welcome (I) Ltd — 2007 (216) E.L.T. 522 (Tri.-Mum.)
ii) Cipla Ltd. v. Commissioner of Customs, Chennai — 2007 (218) E.L.T. 547 (‘l’ri.-Chennai)
iii) Astrix Laboratories Ltd. — 2009 (233) E.L.T. 372 (Tri.-Bang.)
The relevant paras and details of the above-mentioned decisions are mentioned in applicant’s submission at para 4.2 above. These decisions consistently held that bulk drugs arc also drugs, particularly where the exemption/benefit entry uses the expression “drugs” without exclusion.
7.6.2 Further, in Aurobindo Pharma Ltd. — 2009 (247) 206 (Tri.-Bang.), it was held that
where .a notification does not distinguish between “drugs” and “bulk drugs”, such distinction cannot be artificially introduced.
7.6.3 Advance ruling decisions:
i) I further note that this Authority, in the case of M/s Cipla Ltd., while examining the applicability of SI. No. 226 of Notification No. 09/2025-Integrated Tax (Rate) dated 17.09.2025 to imports of Bulk Drugs/Active Pharmaceutical Ingredients (APIs), held that APIs/Bulk Drugs arc covered within the expression “All Drugs and medicines” appearing in the said entry. The Authority, after examining the definition of “drug” under Section 3(b) of the Drugs and Cosmetics Act, 1940. the definition of “bulk drug” under the Drugs (Price Control) Order, 2013, and the relevant judicial precedents, concluded that Bulk Drugs/APIs are drugs for the purposes of the said notification and are therefore eligible for levy of IGST at the concessional rate of 5%.
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 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 372 — AAR, Gujarat and M/s. Allis Finechein 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 SI. No. 226
7.7.1 SI. 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.
7.7.3 In view of the above discussion as well as on conjoint reading of definition of API as mentioned in Drugs (Price Control) Order, 2013 and reading of the definitions of “bioavailability study”. “bioequivalence study” and “clinical trial” as mentioned in New Drugs and Clinical Trials Rules, 2019 read with Section 3(b) of the Drugs and Cosmetics Act that defines drugs, it can be safely concluded that the bulk drugs/APIs falls within the statutory meaning of “drug’. and arc drugs only.
7.8 Whether APIs imported for Clinical Trials / Bioequivalence Studies are excluded:
7.8.1 A question arises as to whether Active Pharmaceutical Ingredients (APIs) imported for use in clinical trials, bioavailability studies or bioequivalence studies can be regarded as falling outside the scope of SI. No. 226 of Schedule I of Notification No. 09/2025-Integrated Tax (Rate) dated 17.09.2025 merely because such imports are not intended for immediate therapeutic administration.
7.8.2 The issue is required to be examined in the light of the statutory provisions of the Drugs and Cosmetics Act, 1940 and the New Drugs and Clinical Trials Rules, 2019.
i) Section 3(b) of the Drugs and Cosmetics Act, 1940 defines “drug” to include substances intended for diagnosis, treatment, mitigation or prevention of disease or disorder in human beings or animals, and also includes components of a drug.
ii) Clinical trials, bioavailability studies and bioequivalence studies are statutorily regulated under the New Drugs and Clinical Trials Rules, 2019, which form part of the legal framework governing the development, evaluation and approval of drugs intended for therapeutic use.
iii) As discussed in para 7.5 above, a combined reading of the definitions of”drug”, “bioavailability study”, “bioequivalence study” and “clinical trial” demonstrates that the statutory scheme treats drugs used in such studies as drugs for the purposes of the regulatory framework.
iv) The definitions relating to bioavailability studies, bioequivalence studies and clinical trials would lose their significance if the term “drug” were interpreted as excluding products used for such studies. The legislative framework clearly contemplates the use of drugs in these regulated activities.
v) Such studies constitute an integral and mandatory part of the drug development and approval process and arc undertaken for establishing the safety, efficacy, pharmacokinetic characteristics and therapeutic equivalence of drugs intended for eventual human or veterinary use.
7.8.3 The essential character of an API as a pharmaceutical substance does not undergo any change merely because, at the time of importation, it is intended for use in a clinical trial, bioavailability study or bioequivalence study. The stage at which the product is utilised does not alter its intrinsic nature, composition or statutory recognition as a pharmaceutical ingredient.
7.8.4 Once a product is recognised as a drug or pharmaceutical substance under the applicable provisions of the Drugs and Cosmetics Act, 1940 and the rules framed thereunder, its character for classification and rate purposes cannot be determined solely on the basis of the immediate purpose for which it is imported. The fact that an API is imported for clinical evaluation, testing or regulatory studies does not detract from its identity as a pharmaceutical ingredient used in the manufacture, development or evaluation of drugs. —
7.8.5 Accordingly, I find no basis to conclude that APIs imported for clinical trials, bioavailability studies or bioequivalence studies stand excluded from the scope of SI. No. 226 of Schedule I of Notification No. 09/2025-Integrated Tax (Rate) dated 17.09.2025 solely on account of such intended use. The applicability of the entry is required to be determined on the basis of the nature and identity of the goods as pharmaceutical ingredients and the relevant statutory provisions governing such products.
7.9 Whether APIs imported under Form 11 for examination, test or analysis arc excluded:
7.9.1 I further observe that certain AP1s/I3ulk Drugs may be imported under Form 11, being a licence issued under the Drugs and Cosmetics Rules, 1945 for import of drugs for the purposes of examination, test or analysis. A possible view may be that goods imported under Form 11 are not intended for immediate therapeutic use and therefore fall outside the scope of Si.. No. 226.
7.9.2 The above view is not acceptable for the following reasons:
(i) Rule 33 of the Drugs and Cosmetics Rules, 1945 specifically permits import of drugs for the purposes of examination, test or analysis under a licence in Form 11. Thus, the statutory framework itself recognises that the goods imported under Form 11 arc drugs.
(ii) Neither the Drugs and Cosmetics Act, 1940 nor Notification No. 09/2025-Integrated Tax (Rate) prescribes that a product must be intended for immediate therapeutic administration at the time of import in order to qualify as a drug.
(iii) Examination, testing and analysis are recognised regulatory activities undertaken for quality assessment, research, product development, validation, ‘stability studies, regulatory compliance and other purposes directly connected with drugs and medicines.
(iv) The purpose for which a drug is imported at a particular stage does not alter its statutory identity or essential character as a drug. A drug imported for examination, test or analysis remains a drug notwithstanding that it is not immediately administered to a patient.
(v) If goods imported under Form 11 were excluded from the scope of “drugs”, the statutory scheme specifically providing for import of drugs for examination, test or analysis would become internally inconsistent, since Form 11 itself proceeds on the basis that the imported goods are drugs.
7.9.3 I therefore find that APIs/Bulk Drugs imported under Form 11 for examination, test or analysis continue to retain their character as drugs under the Drugs and Cosmetics Act, 1940. The intended use for examination, test or analysis does not detract from their identity as drugs and consequently does not exclude them from the scope of SI. No. 226 of Notification No. 09/2025-Integrated Tax (Rate).
7.9 Specific Entry vis-à-vis General Entry
7.9.1 I observe that SI. Nos. 35 and 36 of Schedule II cover “All inorganic chemicals” falling under Chapter 28 and “All organic chemicals” falling under Chapter 29 respectively. These entries are broad and generic in nature, as they encompass all goods classifiable under the said Chapters without any restrictive description.
7.9.2 In contrast, Sl. No. 226 specifically covers “All drugs and medicines…”, without being confined to any particular Chapter of the Tariff. The scope of this entry is description-based rather than Chapter-based, and therefore it operates as a specific entry covering goods answering to the description of drugs and medicines.
7.9.3 It is a well-settled principle of classification that when a product is covered by both a general entry and a specific entry, the specific entry shall prevail over the general entry (generalia specialibus non derogant). Accordingly, Active Pharmaceutical Ingredients (APIs), though classifiable under Chapters 28 or 29 for tariff purposes, when they satisfy the description of “drugs”, are appropriately classifiable under Sl. No. 226 for the purpose of determination of applicable rate of tax. The Sl. No. 226 entry is a specific entry which will prevail over the general entry of “all organic chemicals other than gibberellic acid”.
7.10 Nature of the Notification
7.10.1 I observe Notification No. 9/2025–Integrated Tax (Rate) is a rate notification and not an exemption notification.
7.10.2 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 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.
I observe that the IGST Notification in question is a taxing notification and not an exemption notification. Therefore, applying the ratio laid down in Dilip Kumar & Company, the subject goods of the applicant are appropriately classifiable under Sl. No. 226 of Schedule I to Notification No. 9/2025–Integrated Tax (Rate) dated 17.09.2025, which is a taxing entry and not an exemption entry.
i) 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.
ii) APLs are regulated and licensed as “drugs” by the Central Drugs Standard Control Organization (CDSCO) under the statutory framework of the Drugs and Cosmetics Act, 1940 and the New Drugs and Clinical Trials Rules, 2019, including for import under Forms CT-10 and CT-17. Their regulatory recognition as drugs reinforces their statutory character.
iii) Judicial precedents and advance ruling authorities have consistently held that, in the absence of any restrictive language, the expression “drugs” includes “hulk drugs”, and no artificial distinction can be introduced between the two where the notification does not provide so.
iv) The wording of Si. No. 226 of Schedule 1 to Notification No. 9/2025—integrated Tax (Rate) is broad and description-based, covering “All drugs and medicines…” without restriction to finished formulations, and further extends to goods falling under “Chapter 30 or any Chapter”, thereby encompassing APIs classifiable under Chapters 28 and 29.
v) Sl No. 226 is a specific entry describing goods by their essential character as “drugs”, and therefore prevails over .the general entries covering “all inorganic chemicals” or “all organic chemicals” under Chapters 28 and 29.
vi) The character of APIs as “drugs” does not change merely because they are imported for clinical trials, bioavailability or bioequivalence studies. Such studies are integral to the drug approval process and do not alter the intrinsic statutory identity of the goods.
In view of the forgoing discussion, it is evident that Active Pharmaceutical Ingredients (bulk drugs), including those imported for testing, examination, analysis, clinical research, clinical trials, bioavailability or bioequivalence studies, arc covered under Sl. No. 226 of Schedule Ito Notification No. 9/2025—Integrated Tax (Rate) dated 17.09.2025 and attract IGST at the rate of’5%, subject to the goods not being covered under any NIL-rated entry.
7.11 To sum up:
i) 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.
ii) On a conjoint reading of the definition of “active pharmaceutical ingredient / bulk drug” under the Drugs (Price Control) Order. 2013 with the definition of “drug” under Section 3(b) of the Drugs and Cosmetics Act, 1940, and the definitions of “bioavailability study”, “bioequivalence study” and “clinical trial” under the New Drugs and Clinical Trials Rules, 2019, it is evident that APIs, even when imported for testing, bioequivalence, bioavailability or clinical research purposes, retain their statutory character as “drugs” and arc not excluded merely on account of their stage or purpose of use.
iii) APIs are regulated and licensed as “drugs” by the Central Drugs Standard Control Organization (CUSCO) under the statutory framework of the Drugs and Cosmetics Act, 1940 and the New Drugs and Clinical Trials Rules, 2019, including for import under Forms 10 and CT-17. Their regulatory recognition as drugs reinforces their statutory character.
iv) Judicial precedents and advance ruling authorities have’ consistently held that, in the absence of any restrictive language, the expression “drugs” includes “bulk drugs”, and no artificial distinction Can be introduced between the two where the notification does not provide so.
v) The wording of SI. No. 226 of Schedule I to Notification No. 9/2025—Integrated Tax (Rate) is broad and description-based, covering “All drugs and medicines…” without restriction to finished formulations, and further extends to goods falling under “Chapter 30 or any Chapter”, thereby encompassing APIs classifiable under Chapters 28 and 29.
vi) SI. No. 226 is a specific entry describing goods by their essential character as “drugs”, and therefore .prevails over the general entries covering “all inorganic chemicals” or “all organic chemicals” under Chapters 28 and 29.
(vii) The regulatory framework governing import of drugs consistently recognizes the subject goods as drug’s irrespective of the specific Purpose of import. Form 10 is issued for import of drugs-, Form 11 is issued for import of drugs for examination, test or analysis, and Form CT-17 is issued for import of new drugs or investigational new drugs for clinical trials, bioavailability studies 2nd bioequivalence studies. Accordingly, the purpose of import does not alter the statutory identity of the goods as drugs.
viii) The character of APIs as “drugs” does not change merely because they are imported for clinical trials, bioavailability or bioequivalence studies. Such studies arc integral to the drug approval process and do not alter the intrinsic statutory identity of the goods.
8. In view of the above facts and circumstances of the case, I reach to conclusion that:
8.1 Bulk drugs/Active Pharmaceutical Ingredients (APIs), whether imported for manufacture of formulations or for testing, examination, analysis, clinical research, clinical trials, bioavailability or bioequivalence studies, qualify as “All Drugs” under SI. No. 226 of Schedule I to Notification No. 9/2025—Integrated Tax (Rate) dated 17.09.2025, provided they are not covered under SI. No. 113 of Notification No. 10/2025—Integrated Tax (Rate).
9. I rule accordingly.
