Clarification on taxability of shares held in a subsidiary company by the holding company

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..... 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 of shares in a subsidiary company by the holding company will be treated as supply of service under GST and will be taxed accordingly or whether such transaction is not a supply. 2. In order to clarif .....

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..... s nor services in terms of definition of goods under clause (52) of section 2 of the GGST Act and the definition of services under clause (102) of the said section. Further, securities include shares as per definition of securities under clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956. This implies that the securities held by the holding company in the subsidia .....

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..... 7 of the GGST 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. 3. Difficulty, if any, in implementation of this circular may please be brought to the notice of the Chief Commissioner of State tax. .....

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