The Central Board of Indirect Customs and Taxes (CBIC) on July 17, 2023, issued a notification regarding the taxability of shares held in a subsidiary company by the holding company.
The following has been clarified namely: -
• The Taxability of share capital held in the subsidiary company by the parent company has been clarified as follows namely: -
It states that the activity of holding of shares of a 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.
[Circular No. 196/08/2023-GST]
