By Mr. Basavaraj M, Manager at K.C. Mehta & Co. LLP
The Karnataka High Court has provided clear guidance in IProcess Clinical Marketing Pvt. Ltd. (Judgment dated 8th December 2025).
The dispute arose between GST authorities treated clinical trial services as taxable in India under Section 13(3)(a) of the IGST Act and denied the benefit of Notification No. 04/2019 on the ground that it was prospective.
The High Court rejected this view and held that the notification issued pursuant to the 37th GST Council meeting is clarificatory in nature and therefore applies retrospectively. Once the recipient of services is located outside India, the place of supply is the location of the recipient and the services qualify as export of services.
The court reiterated that beneficial and clarificatory notifications must be applied retrospectively, and tax demands raised by treating such services as domestic supplies are without authority of law.
This ruing offers significant relief to the Pharma and Life sciences sector and strengthens the position that Indian entities providing clinical trails and R&D services to overseas clients are engaged in export of services under GST.
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