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Krishna (Fictional Character): Arjuna, in GST, Composite Supply, Mixed Supply, Taxable Supply, Zero Rated Supply, Exempt Supply, Continuous Supply, Intrastate Supply, Inter-State Supply, etc. are the types of Supply. Among these types Composite Supply and Mixed Supply are the important types. While computing GST on goods or services it is important to understand that whether it is Composite Supply or Mixed Supply.

Arjuna (Fictional Character): Krishna, What is Composite and Mixed Supply in GST?

Arjuna: Krishna, What is Mixed Supply in GST?

Krishna: Arjuna, Mixed supply under GST means two or more individual supplies of goods or services, or any combination, made together with each other by a taxable person for a single price.

Arjuna: Krishna, Exactly what type of supply is covered under Mixed Supply?

Krishna: Arjuna, when more than one goods or services are supplied together for a single price it is called as mixed supply. If anything can be supplied independently or supply of anything is dependent on other it will not be classified as mixed supply. For e.g. Gifts are given on occasion of Diwali consisting of a box of dry fruits having cashew nuts, walnuts, almond, pistachio, etc. are purchased. For the seller, it will be considered as mixed supply.

Arjuna: Krishna, How will be tax computed on mixed supply?

Krishna: Arjuna, Mixed supply comprising two or more supplies shall be treated as supply of that particular supply that attracts the highest rate of tax. For e.g. Dry fruit box will be taxed at the rate of the item attracting highest tax liability. In the above example, some items are under 12% tax rate and some are Zero-rated items, but the entire dry fruit box will be taxed at 12%. In another example, if we supply Corporate Kit consisting of Pen - 12%, wrist watch - 28%, Wallet - 28% and diary -18%, then corporate kit will be taxed at the rate 28%.   

Arjuna: Krishna, What is the composite supply of Goods and Services?

Krishna: Arjuna, The composite Supply means a supply made by a taxable person to a recipient comprising two or more supplies of goods or services, 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 principle supply. For e.g. at the time making sales invoice packing charges, transportation charges, insurance charges are charged then it will be treated as composite supply.

Arjuna: Krishna, How GST will be computed on composite supply?

Krishna: Arjuna, Composite supply compromises two or more supplies, one of which is a principle supply, shall be treated as the supply of such principle supply and will be taxed at the rate of such principle supply. In the above example, the supply of goods will be treated as principle supply and packing materials, transport and insurance will be taxed at the rate of such principle supply. For e.g. If TV of Rs. 25,000/- sold with Rs. 500/- for packing and installation charges then GST will have to be paid on Rs. 25,500/-.

Arjuna: Krishna, what one should learn from this provision of GST?

Krishna: Arjuna, there is a huge impact of mixed supply and composite supply on every person. There was no such concept under the current tax regime. It is necessary for Buyer and seller to understand the concept of mixed supply and composite supply and act accordingly. If mixed supply and composite supply is not taxed as per provisions of the act, then the department will collect excess tax, interest and penalty from the taxpayer. Similarly, if a purchaser has not understood the same he may have to pay a higher tax. 


Published by

CA Umesh Sharma
Category GST   Report

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