Pure-agent treatment accepted for pass-through clinical trial payments, while export-of-service status remained undecided.

The export-of-service question could not be answered because it depended on determining place of supply, and the AAR held that it lacked jurisdiction to decide that point in the circumstances. The ruling therefore left the zero-rating issue open. On the pure agent issue, the contractual arrangements showed that the applicant received funds from the foreign sponsor for onward payment to investigators and local research institutions, with those sums separately traceable from the applicant's own service charges. On that basis, the Authority held that the conditions for pure-agent treatment were satisfied for the pass-through payments to the local research institutions and investigators.

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Issues: (i) Whether the services provided to the foreign client amount to export of service and are zero-rated under GST law; (ii) Whether the applicant qualifies as a pure agent while receiving amounts from the foreign client and passing them on to local research institutions.

Issue (i): Whether the services provided to the foreign client amount to export of service and are zero-rated under GST law.

Analysis: The application raised a question that depended on determination of the place of supply. The Authority noted that its advance ruling jurisdiction did not extend to deciding place of supply in the circumstances presented. Since export of service depends upon the place of supply being outside India, the issue could not be answered on merits within the scope of advance ruling.

Conclusion: The question whether the services amount to export of service was not answered.

Issue (ii): Whether the applicant qualifies as a pure agent while receiving amounts from the foreign client and passing them on to local research institutions.

Analysis: The agreements showed that the applicant received amounts from the foreign sponsor for onward payment to the investigators and institutions, while the actual clinical trial work was performed by those institutions and investigators. The arrangement treated those payments as pass-through amounts, separately traceable from the applicant's own service charges. On the contractual framework placed before the Authority, the conditions for treatment as a pure agent were satisfied for the amounts remitted to the local research institutions.

Conclusion: The applicant qualifies as a pure agent in receiving amounts from the foreign client and passing them on to the local research institutions.

Final Conclusion: The ruling declines to decide the export-of-service question, but accepts pure-agent treatment for the pass-through payments made to the clinical trial institutions and investigators.

Ratio Decidendi: Where the authority lacks jurisdiction to determine the place of supply, the export-of-service question cannot be answered; and where contractual and payment arrangements show pass-through remittances for third-party services distinct from the applicant's own supply, pure-agent treatment is available for those amounts.

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