CBIC notifies place of supply of Research and Development services related to Pharmaceutical


Central Board of Indirect Taxes and Customs (CBIC) on 30th September, 2019 has notified rules regarding determination of place of supply for research and development services related to  pharmaceutical sector. The notification has been brought in order to prevent double taxation or non-taxation of the supply of a service. 

The nature of supply of research and development and the description of supply relating to pharmaceutical are specified in the Table B of the attached notification. 

 “Place of supply” in respect of Supplies specified in Table B made by a person located in a taxable territory to a person located in a non-taxable territory, shall be the place of effective use and enjoyment of service.

Therefore, the place of supply shall be the location of the recipient of services subject to the fulfilment of the following conditions:-

  • Supply of services from the taxable territory are provided as per a contract between the service provider located in taxable territory and service recipient located in non-taxable territory.
  • Such supply of services fulfils all other conditions in the definition of export of services except sub-clause (iii) provided at clause(6) of section 2 of IGST Act, 2017. The place of supply of service must be outside India.

Click here to read the notification.

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