Rajiv (Accountant) (137 Points)
27 April 2018Hi,
We have purchased one Computer server with HSN Code as 8471 and GST Rate 18%
Purchased one LED monitor of 24" under HSN code 8528 with GST rate of 28%
Now we want to supply complete system (Server + LED Monitor) to our customer with single HSN code and single tax rate.
what would be the GST rate and HSN under which we can supply system to our customer.
CA Shivam Arora
(Chartered Accountant)
(2414 Points)
Replied 27 April 2018
Is it a natural practice to supply LCD with computer server(or vice versa) or it occurs once in a while?
CA Shivam Arora
(Chartered Accountant)
(2414 Points)
Replied 27 April 2018
It is mixed supply, since these are not naturally bundled in industry. Therefore HSN Code will be 8528 and rate of tax will be 28%.
Rajiv
(Accountant)
(137 Points)
Replied 27 April 2018
Dear Sir,
How we can mention HSN code as 8528 because it is for monitors only but we are supplying complete system (data processing maching with server and LED monitor) whose HSN code is 8471.
Please clarify.
CA Padmasri Manyam
(CA in Practice)
(1340 Points)
Replied 27 April 2018
Please refer Section 8 of CGST Act, where it is clarified that in case of mixed supply comprising two or more supplies shall be treated as a supply which attracts the highest rate of tax. In your case it is 28% and HSN 8528.
You can mention both the product details in the desciption but HSN is 8528 for the purpose of GST.
CA Shivam Arora
(Chartered Accountant)
(2414 Points)
Replied 27 April 2018
Section 2(74) “mixed supply” means two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply.
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;
Section 8. The tax liability on a composite or a mixed supply shall be determined in the following manner, namely:— (a) a composite supply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply; and (b) a mixed supply comprising two or more supplies shall be treated as a supply of that particular supply which attracts the highest rate of tax.
I would suggest to supply them separately to avoid high tax rate on Computer server.
Rajiv
(Accountant)
(137 Points)
Replied 27 April 2018
But received PO for single item (Complete workstation)
CA Shivam Arora
(Chartered Accountant)
(2414 Points)
Replied 27 April 2018
If both the items can be sold separately and it is not a normal practice in industry(as you said only twice or thrice in a year) then it is a mixed supply.
If it is a normal practice to sell both of them together then it is a composite supply.
Now since you are more close to this type of industry, only you can say whether it is a normal practice or not to supply these 2 products together. Then you apply section 8 accordingly.
Refer example above for more clarity.
Shekhar
(Manager Commercial)
(22 Points)
Replied 13 September 2020
Dear Sir,
We have electronic goods trading company.. We receive PO for all electronic items in single value as package price. Here all items are having 18%gst. My question is what would be hsn code and what item descripttion should be mentioned in invoice if we have to invoice in single value price
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