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

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..... held in a subsidiary company by the holding company. No. CT/GST-15/2017/843.-- 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. .....

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..... 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 Securities Contracts (Regulation) Act, 1956. This implies that the securities held by the holding company in the subsidiary company are neither goods nor services. Further, purchase or sale of shares or securities, .....

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..... ary 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. This Circular is clarificatory in nature and not meant for any interpretation of provisions of the Act and rules. 4. Difficulties, if any, in implementation of the above instructions may be brought to the notice of the Commissio .....

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