Mixed Supply & Composite Supply under GST By Deepti Garg


Section 8: Tax Liability on composite and mixed supply

  • A composite supply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply;
  • A mixed supply comprising of two or more supplies shall be treated as supply of that particular supply that attracts the highest rate of tax.

ANALYSIS

GST is payable on the supply of goods or services or both at the notifies rates. The individual supply does not create any confusion in determining the rate of tax applicable. But when there is a supply of two or more than two items then the different rate of tax is attracted.

COMPOSITE SUPPLY

Composite supply means a supply made by a taxable person which is:

  • Comprises of two or more taxable supply of goods or services or both;
  • Are naturally bundled i.e. are supplied together
  • One of which is a principal supply

In that case, the tax rate which is applicable to the principal supply shall be the rate of composite supply.

For Example: When we purchase a Television Set, it will come with a warranty. Here, the principal supply is Television set and the tax rate which will apply on the supply of Television Set(good) and warranty(service) will be the rate applicable on Television Set.

MIXED SUPPLY

Mixed supply means a supply made by a taxable person which is:

  • Comprises of two or more taxable supply of goods or services or both;
  • Are not a composite supply
  • Each supply can be provided separately

In that case, the tax rate which is the highest among the goods or services or both shall be the rate of mixed supply.

For Example, The gift hampers purchased containing different items. The items present in gift hamper can be supplied individually by the supplier. In that case, the item carrying the highest rate shall be the tax rate for the mixed supply.

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