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

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..... 560009, Dated: 21-07-2023 COMMISSIONER OF COMMERCIAL TAXES CIRCULAR No. GST-09/2023 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 .....

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..... ply of service or not and whether the same will attract GST or not. Securities are considered neither goods nor services in terms of definition of goods under clause (52) of section 2 of KGST 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 .....

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..... unless there is a supply of services by the holding company to the subsidiary company in accordance with section 7 of the KGST 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. Difficulties, if .....

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