CBIC notifies the place of supply of research and development services related to pharmaceutical sector
Central Board of Indirect Taxes and Customs (CBIC) has issued Notification No. 4/2019- Integrated Tax dated 30th September, 2019 to determine the “Place of supply” in case of supply of research and development services related to pharmaceutical sector (as specified in the Table B of the attached document) by a person located in a taxable territory to a person located in a non-taxable territory. It has been provided that the place of supply in such cases shall be the place of effective use and enjoyment of a service in order to prevent double taxation or non-taxation of the supply of a service as per Section 13(13) of Integrated Goods and Service Tax (IGST) Act, 2017. Therefore,the place of supply shall be the location of the recipient of services subject to the fulfillment 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 i.e the place of supply of service is outside India.