2026-VIL-09-KAR
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SGST High Court Cases

GST - Retrospective vs Prospective Nature of Notification and Amendment – Activity of conducting clinical trials for foreign clients – Demand of GST on the petitioner's services, treating them as non-export service - Whether the Notification No. 04/2019 dated 30.09.2019, which clarified that the place of supply for R&D services including clinical trials provided by Indian companies to foreign clients shall be the location of the recipient, i.e., outside India, should be applied retrospectively or prospectively – HELD - The 37th GST Council meeting had recommended issuing a notification under Section 13(13) of the IGST Act, 2017 to clarify that the place of supply of specific R&D services, including clinical trials, provided by Indian pharmaceutical companies to foreign clients shall be the location of the service recipient, i.e., outside India. This was to address the issue that such services were not being treated as exports under Section 13(3)(a) of the IGST Act, which provides that the place of supply is the location where the services are actually performed - The amendments which are clarificatory, elucidatory or declaratory in nature are to be treated as retrospective, as they merely explain the existing law. Since the Notification dated 30.09.2019 was issued pursuant to the 37th GST Council's recommendation to clarify the place of supply for such R&D services, it should be applied retrospectively - The principles laid down by the Supreme Court in Vatika Township case, is that a legislation is presumed to be prospective unless it is clarificatory or declaratory in nature. As the 30.09.2019 notification was intended to clarify the existing law, it should operate retrospectively from the time the IGST Act came into force - As the Notification No. 04/2019 operates retrospectively, the petitioner's services of conducting clinical trials for foreign clients should be treated as exports not liable to GST – The impugned order is set aside and the writ petition is allowed
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