Composite supply of taxable and exempt goods or service

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This query is : Resolved

Kiran Crasta (Querist)

10 March 2018 Does Composite supply applies for only TAXABLE supplies or for EXEMPT supplies also?

As per Sec. 2(30) of CGST Act, 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.

That means we can interpret this for supply of ONLY TAXABLE goods or services or both.

Suppose if the composite supply involves one taxable supply and other exempt supply, will the provisions of section 2(30) and Section 8 applies to arrive at Rate for composite supply? Since the definition of composite supply applies only for combination of taxable supplies and not for combination of taxable and exempt supplies.

Please suggest.

Udaya Chandran

Udaya Chandran (Expert)

12 March 2018 Composite supply applies only for taxable supplies supplied together.

Message likes : 1 times

Kiran Crasta

Kiran Crasta (Querist)

12 March 2018 That means, the illustration given under section 2(30) is contradicting the provisions of section 2(30) as the supply of goods transport service on road is exempt through certain notification. Then how can we charge transport charges at the same rate that of supplied goods?

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

30 October 2026 On the follow-up: the road transport exemption covers only transport supplied on its own; when the seller delivers the goods and charges freight, the freight is not a separate exempt supply but part of the value of the goods under Sec 15(2)(c), so it is taxed at the rate of the goods.

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