Sl. No

Description of services or

circumstances

Place of Supply

1.

Supply of research and development

services  related  to  pharmaceutical

sector  as  specified  in  Column  (2)

and (3) from Sl. No. 1 to 10 in the

Table  B  by  a  person  located  in

taxable territory to a person located

in the non-taxable territory.

The place of supply of services shall be the

location of the recipient of services subject to

fulfillment of the following conditions:-

(i)  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.

(ii) Such supply of services fulfills all other

conditions  in  the  definition  of  export  of

services, except sub- clause (iii) provided at

clause (6) of Section 2 of Integrated Goods

and Services Tax Act, 2017 (13 of 2017).

Sl. No

Nature of Supply

General Description of Supply

1

Integrated       discovery and

development              

This   process   involves   discovery   and development of molecules by pharmaceutical sector for medicinal use. The steps   include   designing   of   compound, evaluation   of the drug metabolism, biological  activity,  manufacture  of  target compounds,  stability  study  and  long-term

toxicology impact.

2.

Integrated development

3.

Evaluation of the efficacy of new chemical/ biological entities   in animal models of disease

This  is  in  vivo  research  (i.e.  within  the

animal)   and   involves   development   of

customized  animal  model  diseases  and

administration of novel chemical in doses to

animals  to  evaluate  the  gene  and  protein

expression       in         response          to         disease.In

nutshell, this process tries to discover if a

novel  chemical  entity  that  can  reduce  or

modify the severity of diseases. The novel

chemical is supplied by the service recipient

located in non-taxable territory.         

4.

Evaluation of biological activity of novel chemical/ biological entities in in-vitro assays             

This  is  in  vitro  research  (i.e.  outside  the

animal). An assay is first developed and then

the novel chemical is supplied by the service

recipient located in non-taxable territory and

is  evaluated  in  the  assay under  optimized

conditions.     

5.

Drug metabolism and

pharmacokinetics of new chemical

entities                        

This process involves investigation whether

a  new  compound  synthesized  by  supplier

can  be  developed  as  new  drug  to  treat

human  diseases  in  respect  of  solubility,

stability  in  body  fluids,  stability  in  liver

tissue and its toxic effect on body tissues.

Promising compounds are further evaluated

in animal experiments using rat and mice.

6.

Safety Assessment/ Toxicology

Safety  assessment  involves  evaluation  of

new chemical entities in laboratory research

animal   models   to   support   filing   of

investigational  new  drug  and  new  drug

application.  Toxicology  team  analyses  the

potential toxicity of a drug to enable fast and

effective drug development.

7.

Stability Studies

Stability  studies  are  conducted  to  support

formulation,    development,  safety  and

efficacy of a new drug. It is also done to

ascertain  the  quality  and  shelf  life  of  the

drug     in         their     intended          packaging

configuration.                                                 

8.

Bio-equivalence and   Bio-

availability Studies                 

Bio-equivalence                      is          a          term     in

pharmacokinetics   used   to   assess   the

expected in vivo biological equivalence of

two      proprietary       preparations     of  a  drug.  If

two products are said to be bioequivalent it

means that they would be expected to be, for

all  intents  and  purposes,  the  same.  Bio-

availability is a measurement of the rate and

extent  to  which  a  therapeutically  active

chemical is absorbed from a drug product

into the systemic  circulation and becomes

available at the site of action.

9.

Clinical trials

The  drugs       that  are  developed  for  human

consumption would undergo human testing

to confirm its utility and safety before being

registered for marketing. The clinical trials

help in collection of information related to

drugs  profile  in  human  body  such  as

absorption,      distribution,     metabolism,

excretion and interaction. It allows choice of

safe dosage.                                                   

10

Bio analytical studies

Bio analysis is a sub-discipline of analytical

chemistry         covering          the       quantitative

measurement of drugs and their metabolites,

and   biological   molecules   in   unnatural

locations          or         concentrations and

macromolecules,          proteins,          DNA,  large

molecule drugs and metabolites in biological

systems.