Under GST ‘Mixed Supply‘ Means a combination of two or more goods or services made together for a single price. Each of these items can be supplied separately and is not dependent on any other.

Under GST ‘Composite supply‘ means a supply comprising  two or more goods/services, which are naturally bundled and supplied in with each other in the ordinary course of business, one of which is a principal supply. it Means that the items are generally sold as a combination

Basis Mixed Supply Composite Supply
Basis of Determination A supply can be a mixed supply only if it is not a composite supply.

If the items can be sold separately, i.e., the supplies not naturally bundled in the ordinary course of business, then it would be a mixed supply.

A supply of goods and/or services will be treated as composite supply if it fulfills the following criteria:

  • Supply of 2 or more goods or services together AND
  • It is a natural bundle, i.e., goods or services are usually provided together in the normal course of business. 
  • They cannot be separated.
Tax Liability 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. 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
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. 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.

Meaning of Bundled Service:

“‘Bundled service’ means a bundle of provision of various services wherein an element of provision of one service is combined with an element or elements of provision of any other service or services.

An example of ‘bundled service’ would be air transport services provided by airlines wherein an element of transportation of passenger by air is combined with an element of provision of catering service on board. Each service involves differential treatment as a manner of determination of value of two services for the purpose of charging service tax is different.

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