Broad drug entry covers active pharmaceutical ingredients for clinical studies and formulations, attracting reduced IGST treatment.

The rate entry for "all drugs and medicines" under Sl. No. 226 of Schedule I to Notification No. 9/2025-Integrated Tax (Rate) was construed broadly by reference to the Drugs and Cosmetics Act, 1940 and related drug-control rules. Bulk drugs and active pharmaceutical ingredients, including imports for manufacture of formulations, testing, clinical trials, bioavailability or bioequivalence studies, were treated as drugs because the statutory framework includes substances used as components of a drug. The specific drug entry was held to prevail over the general chemical entries in Chapters 28 and 29, so these imports attract IGST at 5%, subject to the nil-rate entry not applying.

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Issues: Whether bulk drugs or active pharmaceutical ingredients imported for manufacture of formulations or for testing, clinical trials, bioavailability or bioequivalence studies fall within "all drugs and medicines" under Sl. No. 226 of Schedule I to Notification No. 9/2025-Integrated Tax (Rate), and attract IGST at 5% rather than the general entries for Chapters 28 and 29.

Analysis: The rate notification did not define "drugs", so the meaning was derived from the Drugs and Cosmetics Act, 1940 and the related drug-control framework. The statutory definition of drug is broad and includes substances intended for use as components of a drug, while the definition of bulk drug in the Drugs (Price Control) Order, 2013 covers pharmaceutical or chemical substances used as such or as ingredients in formulations. The licensing and regulatory framework for import of APIs under the New Drugs and Clinical Trials Rules, 2019 reinforced their treatment as drugs. The expression in Sl. No. 226 was held to be description-based and broad enough to cover APIs, and the reference to "or any Chapter" showed that coverage was not confined to finished formulations in Chapter 30. The specific entry for drugs and medicines was treated as prevailing over the generic chemical entries in Chapters 28 and 29. The purpose of import for clinical research or bioequivalence did not alter the statutory character of the goods as drugs.

Conclusion: Bulk drugs or APIs, including those imported for testing, clinical trials, bioavailability or bioequivalence studies, are covered by Sl. No. 226 of Schedule I to Notification No. 9/2025-Integrated Tax (Rate) and are liable to IGST at 5%, subject to not being covered by the nil-rate entry.

Ratio Decidendi: Where the governing tariff entry uses the broad expression "all drugs and medicines" and the applicable drug law defines drugs to include substances used as components of a drug, active pharmaceutical ingredients remain drugs for rate purposes even when imported for research or clinical-study purposes, and the specific drug entry prevails over general chemical entries.

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