This circular provides clarity on whether a holding company’s investment in the shares of its subsidiary amounts to a supply of services under GST. It explains that shares are classified as “securities,” which are neither goods nor services under the CGST Act. Buying, holding or selling shares does not constitute a supply on its own. The presence of a service classification entry relating to holding companies does not create a taxable supply unless the holding company actually provides a service to the subsidiary as defined under section 7.

Therefore, merely holding shares of a subsidiary does not amount to a supply of services and is not liable to GST.