GST on sales of Tractor Cultivator and Hood

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A dealer is invoicing a tractor, cultivator, and hood together for a consolidated price, charging 12% GST. The query centres on whether this constitutes a composite or mixed supply, given the different GST rates for tractors/cultivators (12%) and hoods (18%). The consensus suggests it's a composite supply, meaning the GST rate of the primary item (tractor) applies to the entire bundle, and no ITC reversal is needed for the 'free' supply of the hood and cultivator.

PARAS CHHAJED

PARAS CHHAJED

(Querist)
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11 December 2021 A dealer is selling tractor with its hood and cultivator for Rs.6,25,000 which includes cost of three items and charging GST @12%. In the invoice he is mentioning three items but putting consolidated value as Rs.6,25,000. Rate of GST on Tractors and Cultivators is 12% and that on Hood is 18%. My queries are :
1. Whether this will be case of composite supply or mixed supply ?
1a. If ii is composite supply, then the rate of GST on Tractor shall be applicable irrespective of the fact that Hood having GST rate of 18% is also supplied?
1b. If it is a mixed supply then the rate of GST would be 18% on whole amount as is applicable to Hood irrespective of the fact that its cost is just Rs.2,000 while tractor costs Rs.6,00,000 and cultivator costs Rs.23,000 ?
2. If the separate amount is not being charged, can it be treated that tractor alone is sold and cultivator and hood are supplied free of cost and in that case can the ITC on these items may not be allowed to be claimed and if claimed will have to be reversed?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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11 December 2021 It's a composite supply, single rate of GST can charged as applicable to main supply.

PARAS CHHAJED

PARAS CHHAJED

(Querist)
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12 December 2021 The invoice is like this:

Tractor 1 No. Rs.6,25,000
Cultivator 1 No
Hood 1 No.

No amount is mentioned against two items.

May this mean that Cultivator and Hood are supplied free of cost ? And if free then do one need reverse the ITC on such free supplies ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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12 December 2021 It will not be considered as free supply. It will be composite supply. ITC reversal not required.

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