TMI Blog2016 (9) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of goods that are required to be made physically available by the service receiver to the service provider (applicant). Further, Clinical Research service provided in respect of goods that are required to be made physically available by the service receiver to the service provider (applicant) are also taxable under the Act in light of Rule 4 of the Place of Provision of Services (POP) Rules, 2012. However, where service of Clinical Pharmacology is not provided by the applicant and only service of Clinical Research is provided, then such service would not be in relation to formulation provided by the service receiver located outside India, to the applicant. Hence, it would be not taxable under the Act in light of Rule 3 of the Place of Provision of Services (POP) Rules, 2012 as the applicant renders said services to its customers and the place of provision is located outside India. - Ruling No. AAR/44/ST-I/ 27 /2016 in Application No. AAR/44/ST-1/13/2015 - - - Dated:- 12-7-2016 - V.S. Sirpurkar, Shri S.S.Rana and Shri R.S.Shukla, JJ. For The Appellant : Sh. Tarun Gulati, Sh. Kishore Kunal, Sh. Manish Rastogi For The Department : Shri Ranjan Khanna (AR) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m, safely data reports, medical translation and study related forms and logs; d) Project Monitoring: 24/7 response line for medically related questions or report adverse events. e) Compliance: Audit of investigator sites as per protocol and other regulatory requirements like GCP compliance review, IRB/EC audits, on-site investigator audits, drug accountability reviews, database audit, study document reviews. 2. In terms of the sample Agreement, the applicant will be undertaking clinical trials of the drugs of the customers situated outside India on volunteers in India. The said volunteers will be given dosages of the drug as prescribed by the customers and medical professionals and thereafter, the applicant will be conducting screening of such volunteers wherein the volunteers are kept under observation and their blood samples are tested for identification of various parameters as required by the customers. Pursuant to the said clinical trials, the applicant will be required to report the test results through online medium to the customers. The applicant will be charging consideration from the customers on project to project basis. The above activities form part of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id samples are entirely available in India either provided by the foreign customer or otherwise, the provisions of Rule 4(a) of POP Rules are aptly applicable to the instant case. Further the fact of location of actual performance of service also confirms the applicability of Rule 4 (a) of POP Rules. 6. In short, the issue involved is whether the services i.e. Clinical Pharmacology and Clinical Research proposed to be provided by the applicant shall be liable to Service Tax, as place of provision of service would be location of the recipient of service in terms of Rule 3 of POP Rules or the location where services are actually performed in terms of Rule 4 of POP Rules. It is noticed that as per Rule 14 of POP Rules, where as the provision of a service is prima facie, determinable in terms of more than one rule, it shall be determined in accordance with the rule that occurs later among the rules that merit equal consideration. Therefore, in the case before us, if proposed services are covered by Rule 4, then Rule 3 shall not be applicable. 7. Relevant portion of Rule 4 of POP Rules is reproduced as under: Rule 4- Performance based services: - The place of provision of fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Pharmacology satisfies above referred 2 conditions and therefore would fall in the ambit of Rule 4(a) of POP Rules. 11. The contention of the applicant is that as per requirement of Rule 4(a) of POP Rules, it is mandatory that the services are provisioned qua the specific goods and not class thereof. It is observed that the language of said Rule 4 (a) do not state that services provided be in respect specific goods. Therefore, the contention of the applicant is not correct. 12. Further, applicant placed reliance on paragraph 5.4.1 of the Educational Guide published by TRU, which is one of the Wings under Central Board of Excise Customs (CBEC). Said paragraph is reproduced as under: 5.4 Rule 4- Performance based services 5.4.1 What are the services that are provided in respect of goods that are made physically available by the receiver to the service provider, in order to provide service ?- sub-rule (1) Services that are related to goods, and which require such goods to be made available to the service provider or a person acting on behalf of the service provider so that the service can be rendered, are covered here. The essential characteristic of a serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l of instructions issued by CBEC. Further, it states that it does not command the required legal backing to be binding on either side in any manner. In any case, contents of Education Guide cannot be substitute for POP Rules. As provisions of Rule 4 of POP Rules are clear, Education Guide cannot take precedence over it. 14. Applicant submits that the other service provided by him to the customers located outside India would be Clinical Research, which involves Project Management, Regulatory Affairs, Medical Writing, Project Monitoring, Bio-Statistics Programming and Compliance. During hearing on 22.07.2016, applicant submitted that 2 services proposed to be provided by him i.e. Clinical Pharmacology and Clinical Research, would be on stand-alone services, for which separate invoices would be issued and Clinical Research service cannot be considered as service under Rule 4(b) ibid, as same is not provided in the presence of service receiver or a person acting on behalf of service receiver. 15. It is observed from the application submitted by the applicant that he would be charging consideration from the customers on project to project basis. It is apparent that list of such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not provided by the applicant and only service of Clinical Research is provided, then this service would not be in relation to formulation. Further, there will not be physical presence of an individual, represented either as the service receiver or a person acting on behalf of the receiver, in terms of Rule 4 (b) of POP Rules. Therefore, such service will not fall in the ambit of Rule 4 ibid. 18. In view of above, we rule as under; The proposed activities of undertaking Clinical Pharmacology by the applicant are taxable under the Act in light of Rule 4 of the Place of Provision of Services (POP) Rules, 2012, as the services are proposed to be provided in respect of goods that are required to be made physically available by the service receiver to the service provider (applicant). Further, Clinical Research service provided in respect of goods that are required to be made physically available by the service receiver to the service provider (applicant) are also taxable under the Act in light of Rule 4 of the Place of Provision of Services (POP) Rules, 2012. However, where service of Clinical Pharmacology is not provided by the applicant and only service of Clinical Research ..... X X X X Extracts X X X X X X X X Extracts X X X X
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