This circular clarifies that securities include ‘shares’ as per definition of securities under the CGST Act, this implies that securities held by the holding company in the subsidiary company are considered neither goods nor services under the definition of the CGST Act.
Further, purchase or sale of shares alone does not qualify as a supply of goods or services. To be treated as a supply of services, there must be a supply as defined under Section 7 of the CGST Act.
Hence, mere holding of shares of a subsidiary company by holding company cannot be treated as supply of services and therefore cannot be taxed under GST.
Hey, it's Vanshika Gupta, a CA Finalist, who has graduated from Dr. Bhim Rao Ambedkar College, University of Delhi(DU). Working as an Associate II at Nucleus Advisors, I am passionate about indirect taxation and have experience in it. You can reach me at Vanshika.gupta@nucleusadvisors.in
