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TMI BlogClarification on taxability of shares held in a subsidiary company by the holding companyX X X X Extracts X X X X X X X X Extracts X X X X ..... .................... ............................. Subject: Clarification on taxability of shares held in a subsidiary company by the holding company Ref: Circular No. 196/08/2023-GST dt 17th July, 2023 issued by the CBIC Central Board of Indirect Taxes and Customs (CBIC) has issued the above referred circular. For the uniformity, it has been decided that the said circular issued by the CBIC i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral (All) Madam/Sir, Subject: Clarification on taxability of 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 whethe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 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, in itself is neither a su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 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. (Sanjay Mangal) Principal Commissioner (GST ..... X X X X Extracts X X X X X X X X Extracts X X X X
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