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

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..... taxability of shares held in a subsidiary company by the holding company. The Circular seeks to clarify the issue relating to 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 clarify the issue and to ensure uniformity in the i .....

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..... er clause (52) of section 2 of the HGST 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 subsidiary company are neither goods nor .....

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..... 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. 4. Difficulty, if any, in implementation of this circular may please be brought to the notice of the Department. Commissioner of State Tax, Haryana .....

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