Mixed Supply and Composite Supply – GST

gst supply

Mixed Supply

  • Definition as per sub section 74 of section 2 of CGST Act––

“Mixed supply” means two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply.

Illustration: A supply of a package consisting of canned foods, sweets, chocolates, cakes, dry fruits, aerated drinks and fruit juices when supplied for a single price is a mixed supply. Each of these items can be supplied separately and is not dependent on any other. It shall not be a mixed supply if these items are supplied separately

Composite Supply

  • Definition as per sub section 30 of section 2 of CGST Act––

“Composite supply” means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply;

Illustration.— Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a principal supply;

“principal supply” means the supply of goods or services which constitutes
the predominant element of a composite supply and to which any other supply forming
part of that composite supply is ancillary

Tax Liability on Composite and Mixed supplies (Section 8 of CGST ACT)

The tax liability on a composite or a mixed supply shall be determined in the following
manner, namely:—
(a) 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; and

(b) a mixed supply comprising two or more supplies shall be treated as a supply of that particular supply which attracts the highest rate of tax.

 

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