The circular addresses the taxability of ESOP/ESPP/RSU provided ...

Tax circular clarifies overseas ESOP/ESPP/RSU taxability for Indian employees. No GST on direct share transfer, but GST if foreign company charges fees.

Circulars     GST

June 27, 2024

The circular addresses the taxability of ESOP/ESPP/RSU provided by a company to its employees through its overseas holding company. It clarifies that the transfer of securities/shares by the foreign holding company directly to employees of the Indian subsidiary company, and subsequent reimbursement of costs by the subsidiary company to the holding company, does not constitute an import of financial services liable to GST. The circular emphasizes that such transactions are not considered supplies of goods or services under GST law. However, if the foreign holding company charges additional fees, GST would be leviable on such amounts as consideration for facilitating the transaction. The circular highlights that no supply of services occurs when securities/shares are transferred directly, but GST applies if additional fees are charged.

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