3 Composite & Mixed Supply

TYBCOM :GOODS & SERVICE TAX 2019-20
Chapter 3- COMPOSITE AND MIXED SUPPLY

MEANING AND TAXABILITY OF COMPOSITE AND MIXED SUPPLY [SEC. 8]
Meaning of “composite supply" means a supply made by a taxable person to a recipient

composite supply consisting of two or more taxable supplies of goods or services or both, or
[Sec. 2(30)] 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;
Analysis:
This means that the goods and services are bundled owing to natural
necessities.
Examples
1. 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.
2. when a consumer buys a television set and he also gets warranty and a
maintenance contract with the TV, this supply is a composite supply. In this
example, supply of TV is the principal supply, warranty and maintenance
service are ancillary.
1. Sale of laptop with bag.

2. package of accommodation facilities and breakfast.
Meaning of Mixed supply means two or more individual supplies of goods or services,
mixed supply or any combination thereof, made in conjunction with each other by a
[Sec. 2(74)] taxable person for a single price where such supply does not constitute a
composite supply.
Analysis:
The combination of goods and/or services is not bundled due to natural
necessities, and they can be supplied individually in the ordinary course of
business.
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.
¨A shopkeeper selling storage water bottles along with refrigerator. Bottles
and the refrigerator can easily be priced and sold separately.
1 Prof.Naresh Dhanawade
Tax liability on a a composite supply comprising two or more supplies, one of which is a
composite supply principal supply, shall be treated as a supply of such principal supply;
[Sec. 8(a)]
Example:
Suppose a dealer sells Laptop along with bags. The rate of GST on Laptop
and bag are different. Since the Laptop is a principal supply, the rate of
Laptop shall be applicable on such composite supply.
Tax liability on a a mixed supply comprising two or more supplies shall be treated as a supply
mixed supply [Sec. of that particular supply which attracts the highest rate of tax.
8(b)]
Example:
M/s Cad burry sold gift packets of chocolate 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).
Problems on Composite & Mixed Supply

Illustration 1
Miss Tanuja purchased air conditioners form M/s Cool India ltd . She gets warranty and maintenance contract.
Is this supply called composite supply?
Illustration 2
Miss Limpy purchased tickets to go to London .It includes cost of air travel from Mumbai to London and
catering on board. Is this supply called composite supply?
Illustration 3
Miss pournima purchased tickets of Rajdahani from Mumbai to Delhi. It includes transportation to Delhi and
food on board. Is this supply called composite supply?
Illustration 4
Gift Company sells calendar along with pen to Mr. Sunil for Rs 200. The rat of tax for calendar is 10% and
pen is 20%. What will be GST rate applicable to company on sell of pen?
Illustration 5
Crossword sold canned food on which rate of tax applicable is 10% and water bottle which attract 28% rate of
tax as a package for Rs 200. What will be GST rate applicable to company?
Illustration 6
Miss Rekha gives the ground floor of her house for residence and shop for a rent of Rs 50,000 per month.
Single rent deed is executed. It will treated as mixed supply. Residence purpose is tax free under GST and
place for the purpose of business attract tax rate 18%. What will be GST applicable in this case?
Illustration 7
GOA Resort at GOA advertises the holiday package for 2 days and 3 nights at Rs 5000 per person. It includes
accommodation, transportation from airport and breakfasts. Whether this is composite supply?
Illustration 08
Big Bazar offer a free bucket with detergent power purchased, Is it composite supply or mixed supply?

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TYBCOM :GOODS & SERVICE TAX 2019-20

Chapter 3- COMPOSITE AND MIXED SUPPLY

Meaning of “composite supply" means a supply made by a taxable person to a recipient

1. Sale of laptop with bag.

Problems on Composite & Mixed Supply

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