Classification of APIs as Drugs: statutory character and specific tariff entries govern, so APIs attract the Sl. No. 226 IGST rate.

Imported bulk drugs and active pharmaceutical ingredients (APIs), including imports for manufacture, testing, clinical trials, bioavailability or bioequivalence studies, are captured by the specific descriptive entry for "all drugs and medicines" and formulations from bulk drugs in Sl. No. 226 of Schedule I to Notification No. 9/2025, because statutory definitions and regulatory regimes treat APIs as drugs; the specific entry prevails over general chapter-based entries and the end-use or stage of use does not alter their classification. Consequently such APIs attract IGST at the rate specified in Sl. No. 226, unless covered by Sl. No. 113 of Notification No. 10/2025.

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Issues: Whether imported bulk drugs/active pharmaceutical ingredients (APIs), including those imported for manufacture of formulations or for testing, clinical trials, bioavailability or bioequivalence studies, qualify as "All Drugs" under Sl. No. 226 of Schedule I to Notification No. 9/2025-Integrated Tax (Rate) dated 17.09.2025 and thereby attract IGST @5%, provided they are not covered under Sl. No. 113 of Notification No. 10/2025-Integrated Tax (Rate) dated 17.09.2025.

Analysis: Sl. No. 226 of Schedule I to Notification No. 9/2025 is description-based and covers (i) all drugs and medicines (including salts, esters and diagnostic kits) and (ii) formulations manufactured from bulk drugs, and applies to goods falling under "Chapter 30 or any Chapter." The expression "drug" is not defined in the IGST notification; Section 3(b) of the Drugs and Cosmetics Act, 1940 defines "drug" to include substances intended for diagnosis, treatment, mitigation or prevention of disease and all substances intended for use as components of a drug. Clause (b) of the Drugs (Prices Control) Order, 2013 defines "active pharmaceutical ingredients or bulk drug" as pharmaceutical, chemical, biological or plant products used as such or as ingredients in any formulation. Definitions in the New Drugs and Clinical Trials Rules, 2019 of bioavailability, bioequivalence and clinical trial confirm that products used in such studies remain within the statutory drug regulatory regime. Where a specific descriptive entry (SI. No. 226) and a general chapter-based entry (SI. Nos. 35/36) both could apply, the specific entry prevails. The semicolon in SI. No. 226 separates two independent categories; construing "all drugs and medicines" to exclude bulk drugs would render the separate reference to "formulations manufactured from bulk drugs" redundant. The statutory and regulatory recognition of APIs as drugs, their requirement for CDSCO licensing (Forms 10/CT-17), and consistent judicial/tribunal authorities treating "drugs" as inclusive of bulk drugs support classification of APIs under SI. No. 226. The character of APIs does not change because they are imported for clinical trials or testing; the stage or end-use does not alter their statutory identity as drugs for the purposes of the notification. It is not disputed that the goods are not listed in Annexure I to Notification No. 10/2025 and therefore not nil-rated under Sl. No. 113.

Conclusion: Bulk drugs/active pharmaceutical ingredients (APIs), including those imported for manufacture of formulations or for testing, clinical trials, bioavailability or bioequivalence studies, qualify as "All Drugs" under Sl. No. 226 of Schedule I to Notification No. 9/2025-Integrated Tax (Rate) dated 17.09.2025 and attract IGST at 5%, provided they are not covered under Sl. No. 113 of Notification No. 10/2025-Integrated Tax (Rate) dated 17.09.2025.

Ratio Decidendi: Where a taxing rate notification contains a specific descriptive entry covering "drugs and medicines" and applies to "Chapter 30 or any Chapter," substances statutorily defined or recognized as drugs (including APIs/bulk drugs under Section 3(b) of the Drugs and Cosmetics Act, 1940 and Clause (b) of the Drugs (Prices Control) Order, 2013) fall within that specific entry and therefore attract the rate specified therein; the specific description governs over a general chapter-based entry and the statutory/regulatory character of the goods is determinative notwithstanding their stage of use.

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