Transportation cost in case of mixed supply
This query is : Resolved
06 July 2017
Question : A person is a bakery shop owner. He sells cake, pizza, puff and cold drinks. He accepts party orders and provides home delivery of the things ordered. A customer organizes a small function at his place and orders cake, cold drinks, puff and pizza from this person. An employee of this bakery shop owner will provide home delivery of all these things. Now, as per the principals of composite supply, goods which are naturally bundled, packed and transported, then in that case supply of goods will be the principal supply and the transportation cost will be taxed at the rate of the goods. But, the above given case is an example of mixed supply where all the 4 items can be sold independently, so in that case, at what rate the transportation cost will be charged ? The principals of mixed supply attract the highest amount of tax among all the products but that would be unfair on the customer. If any other solution is available in this case, kindly let me know. Thank You.
06 July 2017
i think separate supply can be made, although it goes in one van/vehicle
06 July 2017
the example of COMBO is the best example of MIXED supply......Otherwise the logic which you are trying to put forth.... even if I, say, purchase, 4 different rated articles from one and same shop....you mean to say the highest rate will apply??????
06 July 2017
Amol sir, I know this is a case of mixed supply and accordingly transportation cost will be taxed at the rate of the item which is attracting highest amount of tax ( so in this case it is Pepsi ) but this would ultimately increase the purchase cost for customer as transportation cost will then be taxed at 40% which is the rate of Pepsi. So as a seller, what other solution I have in this case is my question.
06 July 2017
No, my dear.... This is NOT a mixed supply.......in order to have a better understanding...let me ask you one question.... i go to a medical shop and buy medicine A @ 5% INR2000, medicine B @ 12% INR 1000, medicine C @ 18% INR 500 and cosmetics @ 28% INR 100........you mean to say the medical shop owner will charge me @28% on 2000+1000+500+100 = 3600 under the provision of MIXED supply?????? Please enlighten me on this issue
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06 July 2017
No, my dear.... This is NOT a mixed supply.......in order to have a better understanding...let me ask you one question.... i go to a medical shop and buy medicine A @ 5% INR2000, medicine B @ 12% INR 1000, medicine C @ 18% INR 500 and cosmetics @ 28% INR 100........you mean to say the medical shop owner will charge me @28% on 2000+1000+500+100 = 3600 under the provision of MIXED supply?????? Please enlighten me on this issue
06 July 2017
No, the medical shop owner will not charge you 28%. This medical shop example is similar when we go to a supermarket to purchase goods which have different tax rates, I am clear with this concept. My issue in my example in the question is - will transportation cost be charged at the highest tax rate among the items or not ?
06 July 2017
No. In the first instance it is NOT mixed supply. The bakery shop owner is not making any compulsion to take all the four products at a time..... it is the customer's choice.... to select the products as per his or her choice.....So be assured that it is NOT mixed supply...every item will be charged as per its entry rate....... so also the transportation cost.....ok?
06 July 2017
OK got it so items will be charged at entry rate, and what is the entry rate at which transportation cost will be charged ?
06 July 2017
Services by way of transportation of goods-
(a) by road except the services of (i) a goods transportation agency; (ii) a courier agency;
(b) by inland waterways..............................................
the rate of GST is NIL as decided on 03/07/2017.
(a) by road except the services of (i) a goods transportation agency; (ii) a courier agency;
(b) by inland waterways..............................................
the rate of GST is NIL as decided on 03/07/2017.
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