Pharmaceutical R&D Services Under SAC Code 998113
Medical Research And Development services allow businesses to use specialised resources or knowledge without owning them fully. In day to day work, clients pay a fee or royalty so that they can access these rights or research outputs for their own projects, products or operations.
SAC 998113 is used when the main service is research and experimental development services in medical sciences and pharmacy, including clinical and laboratory research. In simple terms, this code applies where the core agreement is about giving permission or carrying out focused research instead of selling physical goods.
In real life, these services are common in areas like R&D in medical sciences and pharmacy for drugs, devices and treatment methods. Using the correct SAC 998113 under GST helps both service providers and clients keep invoices clear and GST treatment consistent.
Pharmaceutical R&D Services GST Rate for SAC Code 998113
From a GST point of view, medical research and development fees are treated as supply of services. The taxable value usually includes upfront licence fees, recurring royalties, minimum guarantee amounts, renewal charges and any related service or support fees that form part of the same agreement.
After the September 2025 GST revision, most licensing and research based professional services that do not have any special notification continue to fall under the standard 18% slab. Registered business recipients can generally claim input tax credit when these services are used for making taxable supplies, subject to normal ITC conditions.
The table below explains the current standard GST rate for SAC code 998113.
| Code | Description | Old GST Rate (till 21 Sep 2025) |
New GST Rate (from 22 Sep 2025) |
Notes on change / inclusions |
|---|---|---|---|---|
| 998113 | Research and experimental development services in medical sciences and pharmacy. | 18% with ITC | 18% with ITC | Research and development services under heading 9981 have been at 18% since 2017 and continue at 18% after GST 2.0 changes. No specific concession or slab change announced for this heading in the 56th Council documents. |
In practice, service providers who offer medical research and development should apply 18% GST on the taxable value, quote SAC 998113 on tax invoices and keep the same classification in their GST records so that billing and input tax credit remain simple to review.
Explore Other SAC Codes Under 9981
SAC 998113 falls under the wider heading 9981, which covers research and development services across different subject areas. Each six digit SAC under this heading points to a particular research focus so that contracts and GST treatment match the actual work done.
The list below highlights key six-digit SAC codes under 9981.
When selecting a code from the 9981 family, businesses should choose the SAC that best describes the central activity, whether it is medical research and development or some other related service in the same group. Correct use of the six digit SAC and GST rate in % helps avoid disputes, keeps pricing transparent and makes input tax credit planning easier for both sides.
Conclusion
SAC 998113 is meant for medical research and development where clearly defined rights or research work are supplied in return for a fee or royalty. These services are generally taxed at 18% under GST, with ITC normally available to eligible registered recipients when they use the service for taxable business activities. By classifying bills under SAC 998113 and applying the correct GST rate in %, businesses can keep their contracts, invoices and GST compliance neat and easy to support during reviews or audits.
Important Disclaimer
The entire content on this page has been arranged to the best of the author's understanding and is subject to periodic updates as per the law for the time being in force. The above does not constitute professional advice or a formal recommendation. While due care has been taken in preparing this content, the existence of mistakes and omissions cannot be ruled out. BUSY Infotech Private Ltd. and its associates will not be held responsible for any loss or damage arising from any inaccurate or incomplete information in this document. We recommend consulting a professional tax consultant before acting on the information contained in this piece of content.
Frequently Asked Questions
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What does SAC code 998113 cover in GST?
SAC 998113 covers clinical, medical and pharmaceutical research services for drug and device development. It includes clinical trials, bioequivalence studies, protocol based patient studies and related scientific assessments carried out by contract research organisations and hospitals for pharmaceutical companies and medical device manufacturers.
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Does SAC 998113 include clinical, medical and pharmaceutical research for drug development?
Yes. Phase wise clinical trials, observational studies, pharmacokinetic studies and similar projects supporting regulatory approvals of new drugs or formulations generally fall under SAC 998113. The work includes patient recruitment, trial management, data collection, monitoring and reporting as per regulatory and ethical guidelines.
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What GST rate applies to pharma R&D services under SAC 998113?
Pharma and clinical research services under SAC 998113 are usually taxed at 18%. However, certain health services and hospital based activities can have special GST treatment. Service providers must examine whether their specific trial arrangements qualify as taxable research services or as exempt healthcare, based on current notifications.
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Should CROs and pharma companies bill trials and studies using SAC 998113?
Contract research organisations and hospitals conducting commercial clinical trials for pharma companies generally use SAC 998113 for such projects. This helps separate regulated clinical research from regular outpatient or inpatient health services. Detailed contracts and invoices describing the trial type and sponsor are important for correct GST treatment.
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Can pharma companies claim ITC on GST paid for SAC 998113 services?
Pharma companies can usually claim ITC on GST paid for SAC 998113 services, as clinical trials directly support development of taxable pharmaceutical products. If research is for exempt supplies or non taxable activities, ITC may be limited. Proper documentation linking trial costs to future taxable sales is essential.