The CBIC has issued a number of clarifications on the GST treatment of various transactions, including the holding of shares of subsidiary companies by holding companies.

CBIC has stated that the holding of shares of subsidiary companies by holding companies is not a "supply" and will not attract GST. The reason for this is that the holding of shares is not considered to be a "supply" of goods or services under the GST law.

The CBIC has also clarified that the 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.

This means that businesses have a free hand on how they value employee services while charging for internally generated services.

The following are some key points to note about the GST treatment of holding of shares of subsidiary companies by holding companies: The holding of shares of subsidiary companies by holding companies is not a "supply" and will not attract GST.

The salary cost of employees is not mandatorily required to be included for services provided by the head office to the branch office even in cases where full input tax credit is not available.

Businesses have a free hand on how they value employee services while charging for internally generated services.