Holding shares of subsidiary not liable to GST, says CBIC


Holding of shares of subsidiary companies by holding company is not a “supply” and it will not attract any goods and services tax (GST). The Central Board of Indirect Taxes and Customs (CBIC) Monday came up with a series of clarifications including on the much disputed Input service distributor (ISD) mechanism and the cross charge for internally generated services.

The board said that salary cost of employees is not mandatorily required to be included for services provided by the head office to branch office even in cases where full input tax credit is not available and provided businesses a free hand on how they value employee services while charging for internally generated services.


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