ST on advance given by wholly subsidiary company to Holding subsidiary

[Guest]

Hello Sir,

I would like to know that whether Service tax shall be liable if some advance has been given by Wholly owned subsidiary company to Holding company ?

the nature of advance would be incurred the same on business operative expenses.

AI Summary

Advance from Subsidiary to Holding Company Not Taxable as Service Under Section 65 B(44)(a)(iii) of Finance Act 1994 A query was raised regarding the applicability of service tax on an advance given by a wholly-owned subsidiary to its holding company, intended for business operative expenses. Respondents generally agreed that such a transaction, being purely monetary, does not constitute a service under Section 65 B(44)(a)(iii) of the Finance Act, 1994, and thus is not subject to service tax. However, some suggested that if the advance is part of a contractual obligation or for specific services, it might be considered taxable. The discussion highlighted the need for further clarification on the nature of the transaction.