In the normal course of business, when a person supply any good or service to another person then he will charge/collect the GST tax at the rate mentioned in the Act.

However, at the time of combination supply of two or more goods/services or both most person are in the dilemma that whether this particular transaction is a composite supply or a mixed supply. It is very important to proper classification of these transactions because the applicability tax rates under both situations are different.

Today, I will try to shed light on these two terms:

As per 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.


(Tax rate is applicable the tax rate of Principal Supply)

As per section 2(30) “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;


  • Two or more Taxable Supplies,
  • Which are naturally bundled and supplied in conjunction with each other,
  • in the ordinary course of business,
  • One of which is a Principal supply.

It should be a combination of two or more goods or services or both, and this combination is normally supplied by the industry to its customers in the ordinary course. The most important thing is one supply among these should be Principal supply and other supplies depended on that main Principal supply.


  • Booking a Air ticket which includes meal and insurance. In This Principal supply is Air Ticket.
  • Sale of goods with packing, transportation (Fright) and insurance. In this case principal supply is Sale of goods and other services such as packing, freight and insurance are depended on sale of goods.


(Tax rate is applicable the higher tax rate )


*As per sec 2(74) “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.

*Individual Supplies means independent supplies of each other and are not naturally bundled.


A Gift box contains 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.

(Author can be reached at  [email protected])

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February 2021