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Here I would like to share with all of you basic understanding of composite and mixed supply.

  • What is Composite Supply under GST?
  • What is Mixed Supply under GST?

Composite Supply:

Composite supply is when two or more goods are sold in together with combination. It is similar to the bundled of service.

Composite supply of goods or services are provided together in the normal course of business and cannot be separated.

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:

Section 2(90) “Principal Supply” means the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary.

  • Supply of one or more goods or services together.
  • It cannot be separated, and it is naturally bundled.


(1) Booking of Air Tickets which involves the cost of a meal to be provided during travel will be composite supply and tax will be calculated on principal supply.

(2) Where goods are packed and transported by insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a principal supply.

(3) A 5-star hotel provides 4-days and 3-night packages with breakfast. This is a composite supply as the package of accommodation facilities and breakfast is also provided. In this case, hotel accommodation is the principal supply and breakfast is secondary to the hotel accommodation. Hotel accommodation attract 18% tax while breakfast as restaurant service attract 28% tax. In this case, Hotel accommodation is the principal supply and this supply will be taxed at 18%.

(4) A Laptop bag is supplied with the laptop in the ordinary course of business, the principal supply of laptop and bag is ancillary. It is composite supply and rate of tax would be applicable on a laptop.

Mixed Supply:

Section 2(74) of CGST Act 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.

  • Mixed Supply good and services are sold separately.
  • It is not naturally bundled.

Mixed supply consisting of two or more supplies shall be treated as the supply of that item which has the Highest tax rate.


(1) Diwali gift hamper which consists of different Items like sweets, chocolates, cakes, dry fruits packed in one pack is Mixed supply as these items can be sold separately and it shall be treated as a supply of that particular item which attracts the highest rate of

(2) Big Bazar offers a free bucket of detergent purchased. The Product which the highest rate will be applied to mixed supply.

Disclaimer: The contents of this document are solely for informational purpose. It does not constitute professional advice. Neither the authors accept any liabilities for any loss or damage of any kind arising out of any information in this document nor for any actions taken in reliance thereon.

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June 2024