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: Sandvik Asia Pvt. Ltd. (Reference- 2018 Raj AAR)
CASE: Abbott Healthcare Pvt. Ltd. (Ref, 2018, AAR)
CASE: In Re Kailash Chandra (2019) (AAR Rajasthan)
Checklist of deciding Composite or Mixed Supply:
|Nature||Composite Supply||Mixed Supply|
|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.