FAQ’s on Tax liability on composite and mixed supplies

FAQ on Tax liability on composite and mixed supplies under GST, Various Question and Answers on Tax liability on composite and mixed supplies under CGST Act 2017: Section 8 of the CGST Act, 2017 made applicable to IGST vide Section 20 of the IGST Act, 2017 and UTGST vide Section 21 of the UTGST Act, 2017. Check more details at below...

FAQ’s on Tax liability on composite and mixed supplies

Q1. What is composite supply?

Ans. 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.

Q2. How would the tax liability be determined in case of Composite supply?

Ans. 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.

Q3. What is Mixed Supply?

Ans. 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.

Q4. How would the tax liability be determined in case of Mixed supply ?

Ans. 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.