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An Indian clinical-trial service qualifies as an export of services under GST only if it meets all five conditions in section 2(6) of the IGST Act, 2017. A foreign sponsor or payment from abroad is not enough: the place of supply must also be outside India, and the remaining statutory conditions must be satisfied. For clinical-trial work, the place-of-supply analysis can depend on the services actually supplied, the trial goods and their custody, the provider’s role, and any applicable notification. Read the IGST Act.
The five conditions for an export of services
Section 2(6) of the IGST Act sets out five requirements. Test each one for the particular supply; if any condition fails, the supply does not meet the statutory definition of an export of services.
- The supplier is located in India.
- The recipient is located outside India. Identify the actual recipient for the relevant service, not just the sponsor name commonly used for the overall trial.
- The place of supply is outside India. This is often the pivotal and most fact-sensitive condition for clinical-trial services.
- Payment is received in the manner allowed by the statute: in convertible foreign exchange or in Indian rupees wherever permitted by the Reserve Bank of India.
- The supplier and recipient are not merely establishments of a distinct person under the statutory explanation.
The export definition and the place-of-supply rules are in the IGST Act. Keep the payment and corporate-relationship tests separate from the place-of-supply analysis; passing one does not establish the others.
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“Clinical-trial services” is not necessarily one indivisible supply for GST purposes. Review the master services agreement, work orders, statements of work, invoices, and actual performance to establish who supplies each material service, who contracts for it, who receives it, and what trial sites, investigators, or subcontractors do. The relevant facts may differ between research activities, trial-site work, and coordination or support functions.
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Map the parties and responsibilities before choosing a place-of-supply rule. The Cliantha Research ruling and the Asiatic Clinical Research case record concern particular applicant arrangements; neither should be treated as a ruling on every CRO, sponsor, or contract structure.
Determine the place of supply
Apply the general rule, then check for a more specific one
For cross-border services, section 13 of the IGST Act generally places the supply where the recipient is located, unless a more specific provision applies. The question is not resolved simply because the sponsor is abroad or because some work is performed in India. Identify the recipient for the particular supply and assess the relevant exceptions in the statutory context. The Act sets out the place-of-supply rules.
Examine whether goods are physically made available
Section 13(3)(a) addresses services supplied in respect of goods that the recipient must physically make available to the supplier, or to the supplier’s representative, to provide the service. For a trial, document whether the sponsor’s investigational product or other goods are made available to the Indian provider or its representative, where the goods are during the work, and how they relate to the service being supplied. The fact that a drug is physically present at an Indian trial site should not, by itself, be treated as conclusive: the applicable rule, any exception or notification, and the actual arrangement all need to be assessed.
Use Cliantha as a fact-specific example
In its 4 May 2019 ruling in Cliantha Research Limited, the Maharashtra Authority for Advance Ruling concluded that the clinical trials and support services before it, performed at the applicant’s facilities in India, had a place of supply in India and did not qualify as export services. This is a significant example of how the issue has been addressed, but it is an applicant-specific ruling based on the arrangement and law considered there—not a blanket answer for every clinical-trial service or later tax period. Read the Cliantha order; the GST Council case index records the question as whether the proposed services were eligible to be treated as an export under section 2(6).
Check whether the Indian provider is an intermediary
The IGST Act’s intermediary definition covers a broker, agent, or other person who arranges or facilitates a supply between two or more persons, while excluding a person who supplies the relevant goods or services on its own account. If the intermediary place-of-supply rule in section 13(8)(b) applies, the place of supply is the supplier’s location; for an Indian supplier, that can prevent the service from meeting the export condition.
Focus on what the provider actually undertakes and is responsible for, rather than relying only on labels in a contract:
- Research service on the provider’s own account: assess the provider’s own deliverables, obligations, and responsibility for the work.
- Arranging or facilitating another person’s supply: examine whether the provider’s role is instead to bring about or facilitate a supply between other parties.
CBIC Circular 107/26/2019-GST says intermediary status depends on the facts and circumstances, including which service is the principal or main supply. The circular and CBIC’s sectoral FAQ are relevant guidance; neither makes the contractual label alone decisive.
Test the corporate relationship and payment chain separately
Confirm the supplier and recipient entities
Identify the precise legal entities that supply and receive each service. A foreign parent or affiliate may be the recipient, but the distinct-person condition in section 2(6) must still be considered. CBIC Circular 161/17/2021-GST addresses supplies by an Indian subsidiary or group company to a foreign group company. Apply its clarification to the actual corporate structure rather than assuming that every group-company supply is either eligible or ineligible. Read Circular 161/17/2021-GST.
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Reconcile consideration, invoices, and offshore subcontracting
Trace the contractual consideration against the invoices and payment records. If the foreign recipient pays an overseas subcontractor directly for part of the work, consider CBIC Circular 78/52/2018-GST, which addresses when such a payment can count as consideration for export services. Match the subcontracted scope and payment flow to the circular’s conditions; do not assume that any offshore payment automatically satisfies the export payment requirement. Read Circular 78/52/2018-GST.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Account for later notifications and court developments
The law and relevant notifications for the period under review matter. A 2025 Karnataka High Court judgment record in Iprocess Clinical Marketing concerns clinical trials, sections 13(2) and 13(3)(a), and Notification No. 04/2019-Integrated Tax. The available record excerpt reports the petitioner’s argument that the notification clarified pharmaceutical-sector services, including clinical trials, and should apply retrospectively. That argument, by itself, does not establish the court’s final holding, the notification’s full effect, or the result for every trial arrangement. Consult the judgment record and verify the full judgment and applicable notification for the relevant period before relying on a particular interpretation.
Accordingly, neither “all clinical trials are exports” nor “no Indian clinical-trial service can be an export” follows from the materials above. The result depends on the statutory tests and the applicable law for the transaction and period in question.
Documents to assemble before deciding
A transaction-specific review should be grounded in the documents and operational facts that identify the supply, parties, goods, and payment:
- Master services agreement, work orders, and statements of work.
- Identity and location of the supplier, recipient, sponsor, trial sites, investigators, and relevant group entities.
- Description of each deliverable and each party’s responsibility for it.
- Records showing who supplied trial products or other goods, who had custody, where the goods were during the work, and whether they were made available to the provider or its representative.
- Site and CRO responsibilities, including any role in arranging or facilitating another party’s supply.
- Subcontracting terms, invoices, and any direct payments by the foreign recipient to overseas subcontractors.
- Bank and other payment records relevant to the statutory payment condition.
- The notification text and effective dates, and the rulings or court decisions relevant to the contract period.
For refund claims, verify the current rules and filing requirements as well as export eligibility; CBIC publishes the GST refund rules. Where the conclusion affects tax treatment, a letter of undertaking (LUT), or a refund position, obtain advice from an Indian GST professional based on the specific contracts, operations, and period.
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