ESOP and RSU GST treatment clarified for foreign holding company share allocations and cost-to-cost reimbursements. Clarification is issued on the GST treatment of ESOP, ESPP and RSU arrangements where a foreign holding company directly allocates shares or securities to employees of an Indian subsidiary as part of the compensation package. The circular explains that the transfer of shares or securities is not a supply of goods or services under GST, and that employee participation under the employment contract is outside GST under Schedule III. Cost-to-cost reimbursement by the subsidiary is not treated as import of services, but any additional fee, markup or commission charged by the foreign holding company is taxable as a facilitation or arranging service on reverse charge basis.