Clinical trial services qualify as export of service when final reports are delivered outside India and used abroad.

Clinical trial services were treated as technical testing and analysis services under the Finance Act, 1994, and were regarded as export where the service was completed by delivery of the study report and certificate to the foreign client outside India. Rule 3 of the Export of Services Rules, 2005 was applied to require performance outside India, or delivery and use outside India with consideration received in convertible foreign exchange. On those facts, the service satisfied the export conditions and was not liable to service tax.

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Issues: Whether clinical trial services amounted to export of service under the Export of Services Rules, 2005 and were therefore not taxable service liable to service tax.

Analysis: The service in question fell within the taxable category of technical testing and analysis under the Finance Act, 1994. Under Rule 3 of the Export of Services Rules, 2005, such service is treated as export when it is performed outside India, or where partly performed outside India, the service is delivered outside India and used outside India, with payment received in convertible foreign exchange. The service was completed only upon delivery of the study report and certificate to the foreign client, and the delivery of such report outside India was an essential part of the service. On those facts, the service satisfied the conditions for export.

Conclusion: The service was export of service and not taxable. The Revenue's appeal failed.

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