Category: Composite and Mixed Supply

In terms of Section 2(74) of the CGST Act, 2017 ‘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. The illustration appended to the definition of ‘mixed supply’ reads as follows:
A supply of a package consisting of canned foods, sweets, chocolates, cakes, dry fruits, aerated drink 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(b) provides that the mixed supply whether involves supply of goods or services shall be ascertained on the basis of a particular supply forming part of the mixed supply which attracts highest rate of tax. In other words, the mixed supply, if involves supply of any service liable to tax at the higher rate than any goods covered therein, such mixed supply would qualify as supply of services and accordingly the provisions relating to time of supply of services would be applicable. Alternatively, the mixed supply, if involves supply of any goods liable to tax at the higher rate than services covered therein, such mixed supply would qualify as supply of goods and
accordingly the provisions relating to time of supply of goods would be applicable.
E.g.: During an exhibition, the package consisting of canned foods, sweets, chocolates, cakes, dry fruits, aerated drink and fruit juices are supplied by the organizer of exhibition. This would qualify as mixed supply since exhibition of services and other goods are supplied in conjunction. The rate of tax applicable (presumed) to each of the
goods and services:

(Review Illustration)
Exhibition services – 18%
Dry fruits and fruit juices – 5%
Canned foods, sweets, chocolates, cakes and aerated drink – 12%
Nature of supply (highest rate) Supply of services – 18%

(ICAI FAQ PUBLICATION 06-09-2017 : Time and Value of Supply -FAQ NO. 25)

In terms of Section 8, the tax liability in case of a mixed supply shall be ascertained with reference to that particular supply which attracts highest rate of tax.

(ICAI FAQ PUBLICATION 06-09-2017 TAX LIABLITY ON COMPOSITE AND MIXED SUPPLY : FAQ NO. 12)

In terms of 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. The illustration of mixed supply appended to Section 2(74) is as follows:
A supply of a package consisting of canned foods, sweets, chocolates, cakes, dry fruits, aerated drink 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.

(ICAI FAQ PUBLICATION 06-09-2017 TAX LIABLITY ON COMPOSITE AND MIXED SUPPLY : FAQ NO. 11)

In terms of Section 8 of the CGST Act, 2017, tax liability in case of composite supply should be determined with reference to the principal supply forming part of such composite supply.

(ICAI FAQ PUBLICATION 06-09-2017 TAX LIABLITY ON COMPOSITE AND MIXED SUPPLY : FAQ NO. 10)

In terms of Section 2(30) of CGST Act, 2017, 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, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply. The illustration of composite supply appended to Section 2(30) is as follows:
Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a principal supply.

(ICAI FAQ PUBLICATION 06-09-2017 TAX LIABLITY ON COMPOSITE AND MIXED SUPPLY : FAQ NO. 9)