A biotech research services company that runs assays, develops methods or analyses data for overseas sponsors declares those service invoices on one monthly EDF, filed with its AD bank, or with the SEZ Development Commissioner if the lab sits inside an SEZ. The research report you email is a service export; a vial, cell line or compound you physically ship may be a goods export, and keeping those two apart is the most important habit for this sector.
Key takeaways
- Research delivered as data and reports is a service and goes in Part 2B of the monthly EDF.
- Physical materials shipped abroad may be goods, which follow the goods process with a shipping bill or manual EDF. Ask your bank and customs broker.
- P1008 (research and development services) is the natural purpose code to discuss with your bank. R&D has its own SAC codes; confirm the exact one with your CA.
- Advance payments are common in sponsored research. For services other than software, the EDF can be filed on or before the date payment arrives.
- Pass-through costs such as reagents and outsourced tests need a clear invoicing policy.
Services and goods in the same lab
Research companies sit on a line that most IT firms never meet.
| What leaves your lab | Likely treatment | Where it goes |
|---|---|---|
| Study report, data files, analysis | Service | Monthly EDF, Part 2B, to AD bank (or DC if SEZ) |
| Bioinformatics or statistical analysis | Service | Monthly EDF, Part 2B |
| Method development documentation | Service | Monthly EDF, Part 2B |
| Synthesised compound, cell line or biological samples shipped abroad | Possibly goods | Goods process: shipping bill at EDI ports, manual EDF at non-EDI ports |
| Samples returned to sponsor after testing | Depends on ownership and contract | Ask your customs broker and bank |
If a single contract covers both research services and shipped material, ask your CA whether the invoice should separate them. Mixing them on one line makes both your EDF and your customs paperwork harder to defend.
Where to file
- Outside an SEZ: EDF to the AD bank where the sponsor's payment lands.
- Inside an SEZ: EDF to the SEZ Development Commissioner. Our glossary entry on the Development Commissioner explains the role.
- 100% EOU: select the right category in field 1.5 and confirm the filing route with your bank.
How research gets billed
| Model | How it works | EDF effect |
|---|---|---|
| FTE-based | Sponsor pays per scientist per month | Steady monthly invoices, similar values |
| Per study or per milestone | Fixed fee per protocol stage | Lumpy invoices, often above ₹10 lakh |
| Per sample | Price per sample tested | Volume-driven invoices |
| Advance plus balance | Mobilisation advance, balance on report | Two invoices; timing questions on the advance |
| Pass-through | Reagents, animals, third-party tests recharged | Needs policy: within fee or separate line |
Codes to discuss
The RBI purpose code list includes P1008 for research and development services, which fits most sponsored research. Confirm it with your bank, and check that remittances are not tagged with a generic code.
For GST, research and development services have their own SAC heading. We are not listing a code here because the right six digits depend on the field of research and how the contract is framed; take your contract to your CA. Use our purpose code finder to prepare for the conversation with the bank.
Advance payments
Sponsors often pay a mobilisation advance before a study begins. Two rules from the Regulations help here:
- For services other than software, the EDF may be submitted on or before the date payment is received, as an alternative to the standard 30-days-after-month-end deadline.
- In Part 4 you choose between "will be received" and "has been received". If the advance has already arrived, "has been received" is the honest choice for that invoice.
Our article on EDFs for advance payments covers the sequencing in detail. Banks may hold an incoming credit until the EDF is provided, so a large advance arriving without a matching EDF can sit unused. If you expect an advance, prepare the invoice and EDF before it lands.
A worked example
Helix Arc Biosciences Pvt Ltd runs a contract assay laboratory in Hyderabad, outside any SEZ. In February 2027 it raised these invoices:
| Invoice | Sponsor | Country | Description | Amount |
|---|---|---|---|---|
| HA/27/014 | Corran Therapeutics Inc. | USA | FTE services, 4 scientists, February | USD 22,000 |
| HA/27/019 | Lindqvist Pharma AB | Sweden | Mobilisation advance, stability study | EUR 9,000 |
| HA/27/023 | Corran Therapeutics Inc. | USA | Reagent pass-through, February (at cost) | USD 2,350 |
Lindqvist paid the advance on 19 February, the same day it was invoiced. Helix Arc's bank had held a previous advance until the EDF arrived, so this time the team submitted a short EDF for the advance invoice on 18 February, using the alternative timing available for non-software services. The remaining two invoices went on a second EDF for February, filed by 30 March 2027. Before doing this, Helix Arc confirmed with its bank that two EDFs for one month were acceptable.
The FTE invoice is above ₹10 lakh at any realistic exchange rate, so on payment Helix Arc will send the invoice, FIRA and matching instructions. The reagent recharge is billed at cost on a separate line, with the contract clause allowing it noted in Part 2B remarks.
Helix Arc also shipped a small batch of reference material to Corran that month. Its customs broker handled that as a goods export, entirely outside the services EDF.
Realisation for long studies
Sponsors sometimes pay only on report acceptance, and studies run long. The 9-month realisation period runs from each invoice date, not from study completion. Invoice when the contract allows you to, and if a payment will clearly miss the window, ask your AD bank for an extension with reasons before the deadline.
GST and LUT
Research services exported to an overseas sponsor are zero-rated when the Section 2(6) IGST conditions are met, including that the place of supply is outside India. Place of supply can be less obvious for services performed on goods or samples physically made available in India, so research labs should have their CA review this specifically. Under LUT (Form GST RFD-11), the invoice carries "Supply meant for export under LUT without payment of IGST". This is general information, not legal or tax advice.
Frequently asked questions
Is contract research for a foreign sponsor an export of services?
Generally yes, when the sponsor is outside India, pays in foreign exchange and the other conditions for export of services are met. Research performed on samples physically in India can raise place-of-supply questions for GST, so ask your CA to review your contracts.
Which purpose code applies to biotech research services?
P1008 (research and development services) is the natural starting point. Confirm with your bank and ask it to correct any remittance tagged with an unrelated code.
Do I declare shipped samples or compounds on the services EDF?
No. Physical goods shipped abroad follow the goods process, typically with a shipping bill at EDI ports or a manual EDF at non-EDI ports. Keep them off Part 2B and ask your customs broker how to handle them.
Can I file the EDF before an advance arrives?
Yes. For services other than software, the EDF may be submitted on or before the date payment is received. Filing early can stop the bank holding the advance while it waits for the form.
Our lab is in an SEZ. Who receives our EDF?
The SEZ Development Commissioner. Units outside an SEZ file with their AD bank.
Bottom line
For research companies, the EDF is simple once you separate what you report from what you ship. Keep services in Part 2B, goods in the goods process, and advances ahead of the money. Build your monthly form with the free EDF form generator, and if you run clinical trials as well, read our guide for clinical research organisations.
This guide is general information for Indian businesses, not legal or tax advice. Rules and bank processes change — confirm specifics with your AD bank or chartered accountant.