Tax liability on composite and mixed supplies– Section 8 of CGST Act :
| Section 8 – Tax Liability on Composite or Mixed Supply | |
|
A supply consisting of 2 or more supplies |
Treated as Supply of |
| Composite supply of 2 or more supplies and one of which is a principal supply | Principal Supply |
| Mixed supply of 2 or more supplies | That particular supply which attracts highest rate of tax |
| Composite Supply [Sec 2(30)]:
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. Illustration: 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 |
| Principal Supply [Sec 2(90)]:
means the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary |
| Mixed Supply [Sec 2(74)]:
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 |