Composite Supply Vs Mixed Supply Under GST (Happy GST Series-2) by CA Rajender Arora

Basis

Composite Supply

Mixed Supply

Governing Provision

Section 8(a) of CGST Act'2017

Section 8(b) of CGST Act'2017

Meaning

1. Contains two or more supplies,
2. It is a naturally bundled
3. Amongst which one is essential one i.e. principal supply
4. Complete supply shall be treated as principal supply

1. It also contains two or more supplies,
2. Which is formed as an artificially bundled
3. With an objective to pay lower tax on higher tax rate items.
4. Complete supply shall be treated as supply of item attracting higher rate of tax

Examples

Examples:

1. Work Contract or Restaurant Service
2. A 5 star hotel is booked for a conference of 100 delegates on a lump sum package Accommodation, Breakfast, Access to fitness room, Availability of conference room, Business center is a natural bundle.

Examples:

1. Stationery pack containing crayons, paints, brushes, drawing book etc. supplied at a single price to rule out
2. Many shops offer a free bucket with detergent purchased. This is a mixed supply as it does not satisfy the 2nd condition, i.e., it can be sold separately. You can buy either just a bucket or just detergent. The highest rate of GST will then apply. Since detergents have the higher rate (28%), this rate will apply on the whole mixed bundle

Time of Supply

1. If Principal Supply is of Goods- Then provisions of time of supply of Goods shall apply (Sec 12)
2. If Principal Supply is of Service- Then provisions of time of supply of Service shall apply(Sec 13)

1. If Goods is taxed at higher rate- Then provisions of time of supply of Goods shall apply (Sec 12)
2. If Service is taxed at higher rate- Then provisions of time of supply of Service shall apply(Sec 13)

Other Points:

Meaning of Principal Supply: As per Section 2(90) of CGST Act'2017
1.  Goods or services supply having predominant element
2. Other supply forming part is ancillary to supply.

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Circular no.11/11/2017-
GST dated 20.10.2017

• When is a supply constitute supply of service under Composite Supply?

1. In the case of printing of books, pamphlets, brochures, annual reports,
2. Where content given by recipient & physical inputs including paper supplier
3. Principal supply would be supply of service falling under heading 9989.

• When is a supply constitute supply of Goods under Composite Supply?

1. In the case of printed envelopes, letter cards, printed boxes, tissues, napkins, wall paper etc.
2. Where design, logo etc. given by recipient & physical inputs including paper by the supplier
3. Principal supply would be supply of Goods & printing activities is ancillary.

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