In re Amardeep Udyog (GST AAR Maharashtra)
The Maharashtra Authority for Advance Ruling (AAR) has ruled that the “Geometry Compass Box” supplied by Amardeep Udyog to the BrihanMumbai Municipal Corporation (BMC) is a mixed supply and will be taxed at the highest rate applicable to any item within the box, which is 18% (9% CGST + 9% SGST). The AAR classified the entire supply under HSN code 90178010.
Amardeep Udyog sought clarification on the correct classification and GST rate for its Geometry Compass Box, which contains 1 compass, 1 divider, 1 scale (15 cms), 1 set square (30 deg), 1 set square (45 deg), 1 set square (60 deg), 1 protractor (180 deg), 1 eraser, 1 pencil, and 1 sharpener, all supplied in a box.
The AAR analyzed whether the supply constituted a composite supply or a mixed supply under the CGST Act, 2017. A composite supply involves goods or services naturally bundled and supplied together with a principal supply. A mixed supply consists of two or more individual supplies sold together for a single price but are not naturally bundled.
The AAR determined that the Geometry Compass Box is not a composite supply. While a box containing drawing instruments like a compass, divider, scale, protractor, and set squares might be considered naturally bundled, the inclusion of a pencil, eraser, and sharpener alters this. These additional items are commonly sold separately and are not necessarily perceived by consumers as an integral part of a standard geometry box package. The fact that these individual items are readily available separately in the market further supports the conclusion that the entire set is not naturally bundled.
Therefore, the AAR classified the supply as a mixed supply. According to Section 8(b) of the CGST Act, a mixed supply is taxed at the rate applicable to the supply that attracts the highest rate of tax. Upon examining the individual items and their respective GST rates, the AAR found:
