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TMI BlogClarification on taxability of shares held in a subsidiary company by the holding companyX X X X Extracts X X X X X X X X Extracts X X X X ..... Trade Circular 1 6 T of 2023 To, ............................. ............................. Subject: Clarification on taxability of shares held in a subsidiary company by the holding company Ref: Circular No. 196/08/2023-GST dt 17th July, 2023 issued by the CBIC Central Board of Indirect Taxes and Customs (CBIC) has issued the above referred circular. For the uniformity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s/Chief Commissioners/Principal Commissioners/Commissioners of Central Tax (All) The Principal Directors General/ Directors General (All) Madam/Sir, Subject: Clarification on taxability of shares held in a subsidiary company by the holding company. Representations have been received from the trade and field formations seeking clarification on certain issues whether the holding o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the subsidiary company will be treated as a supply of service or not and whether the same will attract GST or not. Securities are considered neither goods nor services in terms of definition of goods under clause (52) of section 2 of CGST Act and the definition of services under clause (102) of the said section. Further, securities include shares as per definition of securities un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of owning a controlling interest. , unless there is a supply of services by the holding company to the subsidiary company in accordance with section 7 of CGST Act. Therefore, the activity of holding of shares of subsidiary company by the holding company per se cannot be treated as a supply of services by a holding company to the said subsidiary company and cannot be taxed under GST. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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