9911796707
TMI Blog2024 (3) TMI 1314X X X X Extracts X X X X X X X X Extracts X X X X ..... any M/s. Metro Cash and Carry International GmbH holds shares in its subsidiary i.e., the petitioner herein, the said circumstance cannot be classified, treated or construed as supply of service for the purpose of GST. Since the issue in controversy involved in the present petition is directly and squarely covered by the judgment of this Court in M/S. YONEX INDIA PRIVATE LIMITED VERSUS UNION OF INDIA, STATE OF KARNATAKA, COMMISSIONER OF COMMERCIAL TAXES BANGALORE, ASSISTANT COMMISSIONER OF COMMERCIAL TAXES (AUDIT 2. 8) BANGALORE [ 2024 (2) TMI 59 - KARNATAKA HIGH COURT] , the impugned Show Cause Notices issued are without jurisdiction or authority of law and the same deserves to be quashed. Petition allowed. - HON'BLE MR JUSTICE S.R. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etition and referring to the material on record, learned counsel for the petitioner invited my attention to the judgment of this Court in the case of M/s. Yonex India Private Limited Vs. Union of India and others W.P. No. 2301/2023 dated 18.01.2024 in order to point out that issue involved in the present petition is directly and squarely covered by the aforesaid judgment and consequently, the present petition deserves to be allowed and disposed of in terms of the said judgment. 4. Per contra, learned AGA does not dispute that the aforesaid judgment in M/s. Yonex India Private Limited case it is held that mere holding of shares by the holding company in the subsidiary company cannot be classified, treated or construed as supply of service . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issuance of the Circulars by the Central Government and the State Government. 6. As rightly contended by the learned Senior counsel for the petitioner, the Central Government has issued Circular dated 17.07.2023, which reads as under: 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 clarify the issue and to ensure uniformity in the implementation of the provisions of law across the field formations, the Board, in exercise of its powers conferred by section 16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 3. It is requested that suitable trade notices may be issued to publicize the contents of this Circular. 4. Difficulty, if any, in implementation of this Circular may please be brought to the notice of the Board, Hindi version would follow. Similarly, the State Government also issued Circular dated 21.07.2023 on the same lines, which reads as under: Representations have be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /activity to be treated as supply of services, there must be a supply as defined under section 7 of KGST Act. It cannot be said that a service is being provided by the holding company to the subsidiary company, solely on the basis that there is a SAC entry '997171' in the scheme of classification of services mentioning: the services provided by holding companies, ie, holding securities of (or other equity interests in) companies and enterprises for the purpose 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 KGST Act. Therefore, the activity of holding of shares of subsidiary company by the holding company per se cannot be treate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e instant case, the parent company is M/s. Metro Cash and Carry International GmbH of which the petitioner herein i.e., M/s. Metro Cash and Carry Pvt. Ltd., is a subsidiary and merely because the parent company M/s. Metro Cash and Carry International GmbH holds shares in its subsidiary i.e., the petitioner herein, the said circumstance cannot be classified, treated or construed as supply of service for the purpose of GST. Under these circumstances, since the issue in controversy involved in the present petition is directly and squarely covered by the judgment of this Court in M/s. Yonex India Private Limited case supra, I am of the view that the impugned Show Cause Notices issued are without jurisdiction or authority of law and the same des ..... X X X X Extracts X X X X X X X X Extracts X X X X
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