All about Composite Supply and Mixed Supply under GST:

As per Sec. 2(30) of CGST Act of 2017, ‘Composite Supply’ is a kind of supply made by a taxable person to a recipient that includes two or more taxable supplies of goods or services or both, or their combination, that are naturally bundled and supplied in conjunction to each other in the ordinary course of business out of which one constitutes to be a Principal Supply (As per Sec. 2(90) of CGST Act of 2017 wherein one supply constitutes to be of pre-dominant element whereas other supplies are ancillary to the former one).

E.g. When a person purchases a T.V. set, he or she also gets some kind of warranty and other allied services in the form of installation and maintenance, and therefore such supply is a composite supply. Here, supplying TV is the principal supply whereas warranty and maintenance service are ancillary or supplementary to such principal supply.

Taxability of Composite Supply: As per Sec. 8(a) of CGST Act of 2017, A composite supply comprising two or more supplies out of which one constitutes a principal supply, shall be treated as a supply of such principal supply.

E.g. I am selling Laptop with bags. The rate of GST on Laptop and bag are different, but here since the Laptop constitutes to be principal supply, the rate of Laptop shall be applicable on such composite supply.

As per Sec. 2(74) of CGST Act of 2017, 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.

E.g. If I am selling sweets, candies, chocolates, cakes, dry fruits as well as cold drinks from my shop, and if such supplies are supplied in a single supply, then the same will be termed as Mixed supply as all of such products can be sold separately with their individual prices, and if I am not charging a single or uniform price, then such supply won’t be termed as mixed supply.

Taxability of Mixed Supply: As per Sec. 8(b) of CGST Act of 2017, A mixed supply comprising two or more supplies be treated as a supply of that particular supply which attracts the highest rate of tax.

E.g. M/s ABC are selling chocolates and fresh Juices. The GST rate of chocolate is 28% & fresh juice liable to GST at 12%. This is the example of mixed supply & would be liable to GST at 28% (higher of 12% or 28% applicable).

Some decided Case Laws:

CASE: Samsung India Ltd. v. CCI

  • Composite supply in relation to mobile was interpreted
  • Allahabad HC
    • Supply of mobile with charger is a composite supply as there is no intention to effect separate sale of charger. Mobile-principal; charger- ancillary.
    • GST will be based on principal supply.

CASE- Switching Avo Electrical Pvt. Ltd. (AAR)

  • AAR and AAAR both rules
  • Question- Supply of UPS along with battery. Whether this is mixed supply or composite supply?
  • AAR said constitute to be mixed supply. Appeal made to AAAR.
  • Appellant contested
    • UPS cannot function without battery and battery is an integral part of UPS. Bundled together and supplied in conjunction with each other.
    • Battery is natural part of the UPS
    • Supply of convertor UPS with external battery should be considered as composite supply and not as mixed supply
  • AAAR
    • When UPS supplied with in-built battery, it constitutes to be composite supply under s.2(30) and if it is sold separately, that is not inbuilt battery, then mixed supply.

CASE: Sandvik Asia Pvt. Ltd. (Reference- 2018 Raj AAR)

  • Supply of maintenance services in relation to machines and supply of other goods and services, in relation to machines.
  • Principal supply- supply of maintenance, supply of goods/other services- ancillary services are related to principal supply.
  • One supply is primary and in relation to that primary supply, other could be naturally related.
  • (When supply of goods and services takes place together, what is important is service taking place)
  • AAR
    • Constitute to be composite supply
    • GST will be determined based on principal supply.

CASE: Abbott Healthcare Pvt. Ltd. (Ref, 2018, AAR)

  • ­Question- Supply of medical instruments along with medicines- Whether constitute to be mixed supply or composite supply?
  • AAR
    • In relation to supply of medicine, even if supplying instruments, that will be considered as composite supply.
    • Medicines, along with instruments, happen to be associated and ancillary products.

CASE: Cable Corporation of India Ltd. (Maharashtra AAR)

  • Even though two separate agreements are rendered in the form of transportation services and works contract, but since both are dependent on each other, therefore the applicant couldn’t escape the GST @18% on such services as both are indivisible contract that aren’t independent of each other, and GST is accordingly levied as per Sr. No. 18 of Notification No. 11/2017, dated 28/06/2017, and therefore doing artificial bifurcation of scope of work and contracts stands impermissible.

CASE: In Re Kailash Chandra (2019) (AAR Rajasthan)

  • Held that supply of transportation, installation, and commissioning of Reverse Osmosis (RO) plant and O&M works by applicant for the government comes under Composite Supply. 

Checklist of deciding Composite or Mixed Supply:

Nature Composite Supply Mixed Supply
Naturally Bundled Yes No
Supplied Together Yes Yes
One is predominant supply of recipient Yes No
All supplies are goods Yes Yes
All supplies are services Yes Yes
Can be supplied separately No Yes
One supply is goods and other is services Yes Yes
Each supply having distinct price No No
Other supply not ‘aim in itself’ of recipient Yes No

Note: Along with the cited case laws, the readers can also refer to such other decided cases as well as Circulars as are being issued by the authorities from time-to-time for clarifying the issues of composite/mixed supply for different goods and /services.


Disclaimer:- The entire contents of this document have been prepared on the basis of relevant provisions and rules and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, I assume no responsibility therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a professional advice and is subject to change without notice. I assume no responsibility for the consequences of use of such information.

Author Bio

Qualification: CS
Company: N/A
Location: Shubham Phophalia, Gujarat, India
Member Since: 08 May 2021 | Total Posts: 54
I am Shubham from Batch 2016-21 of GNLU. I am in my final year of 5 years integrated BA LLB course from GNLU, Gandhinagar, and I have completed Company Secretary Course meanwhile with 3rd Rank in Ahmedabad, Gujarat in CS Professional. I am a keen reader and enthusiastic listener of Corporate laws an View Full Profile

My Published Posts

More Under Goods and Services Tax

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Posts by Date

June 2021