Gujarat GST Advance Ruling GUJ/GAAR/R/2018/34 on Export of Services
The Authority for Advance Ruling rejected a request to classify clinical research as an export of service due to lack of jurisdiction.
- Ruling
- GUJ/GAAR/ADM/2018/34 dated 30.08.2018
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- Lambda Therapeutic Research asked if their clinical trials qualify as export of services.
- The Authority for Advance Ruling rejected the application at the admission stage.
- The Authority stated it cannot determine the place of supply under current law.
In short
The company asked the Gujarat Authority for Advance Ruling (AAR) to confirm if their scientific testing for foreign clients qualifies as an export of service under the Integrated Goods and Services Tax (IGST) Act. To decide this, the authority would have needed to determine the 'place of supply' for these services. The authority refused to answer, stating that the law does not give them the power to decide where a service is supplied.
What has changed
How it worked before
Businesses often sought advance rulings to gain certainty on whether their cross-border services qualified for zero-rated export status under GST.
What has changed
The authority clarified that it will not accept applications that require them to determine the place of supply. This means businesses cannot use the advance ruling process to settle disputes or uncertainties regarding the location where their services are legally considered to be provided.
Who this affects
Clinical research organizations and other service providers performing technical analysis for foreign clients.
An example
A software testing firm in Gujarat performs code analysis for a client in Germany. They want to know if this is an export of service to avoid charging GST. Based on this ruling, if they ask the AAR for a decision, the authority will likely reject the application because it requires determining the place of supply. The firm should instead rely on a formal legal opinion from their tax advisor.
What you should do
Do not assume this ruling provides a precedent for your own tax filings. An advance ruling is only binding on the specific business that requested it and their local tax officer. If you have a similar question, you must consult with a tax professional to evaluate your specific service agreement and the relevant IGST provisions.
If you do nothing
If you assume this ruling confirms your services are exports, you risk underpaying GST. If a tax officer later determines your service was actually supplied in India, you will be liable for the unpaid tax, interest, and potential penalties. Relying on a ruling that does not apply to you is not a valid defense during an audit.
The terms explained
- Advance Ruling
- A written decision provided by tax authorities to a business regarding the tax consequences of a specific transaction.
- Place of Supply
- The location where a service is legally deemed to be provided for tax purposes, which determines whether GST applies.
- Export of Service
- A service provided from India to a recipient outside India, which may be exempt from GST under specific conditions.
The ruling in detail
Authority for Advance Ruling
M/s. Lambda Therapeutic Research Limited
GUJ/GAAR/ADM/2018/34 dated 30.08.2018 · Gujarat
Questions before the authority
- Whether the activity of the applicant provided to foreign clients in the nature of scientific testing and technical analysis on pharmaceutical products will be treated as export of service under the provisions of IGST Act, 2017?
Facts
The applicant is a global clinical research organization that conducts bio-availability, bioequivalence, and clinical trials for pharmaceutical companies located outside India. During these services, the applicant performs scientific testing and technical analysis on pharmaceutical samples provided by the foreign entities, which are consumed in the process and not returned. The applicant receives consideration in convertible foreign exchange and sought to determine if this activity qualifies as an export of service under the IGST Act.
Ruling
| Question | What the authority ruled |
|---|---|
| Jurisdiction to determine place of supply | Rejected The authority held that place of supply is not a matter covered under Section 97(2) of the CGST Act. |
The Authority rejected the application at the admission stage without addressing the merits of the case. It held that it lacked the jurisdiction to determine the place of supply, which is a necessary condition for classifying the activity as an export of service.
Reasoning
The Authority noted that it is a creature of statute and can only decide issues specifically earmarked under Section 97(2) of the CGST Act. It observed that the applicant's question regarding export of service is intrinsically linked to the determination of the place of supply. Since the determination of the place of supply is not included in the list of issues under Section 97(2), the Authority concluded it was **lacking jurisdiction** to answer the question. Consequently, the application was rejected under sub-section (2) of section 98 of the CGST Act.
Provisions relied on
- Section 97(2) of the CGST Act, 2017
- Section 98(2) of the CGST Act, 2017
- Section 2(6) of the IGST Act, 2017
- Section 13 of the IGST Act, 2017
- Section 16 of the IGST Act, 2017
For the practitioner
This ruling serves as a reminder that the Advance Ruling Authority will **decline to entertain applications** where the core issue requires a determination of the place of supply. Practitioners should note that the Authority views its jurisdiction as strictly limited to the specific clauses of Section 97(2). This order does not provide any guidance on the substantive merits of whether clinical research services qualify as an export of service.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/guj.34-2018-19_dt_30.08.18_ltrl.pdf
Legibility of the scan, as read: high.
Prepared 21-10-2026.
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