Difference between Composite and Mixed Supply under GST Law

1)Composite Supply; Any supply of goods or services will be treated as composite supply if it fulfils all the following criteria simultaneously:

• a) Supply of 2 or more goods or services together, and

  ii)Its a natural bundle, as even if you don't opt for food, no deduction in price would be there, and

  iii)Transportation of Passenger satisfies the criteria of principal/main service in the above definition.

  
  

  2)Mixed Supply: Any bundle of goods or services provided together which is not a composite supply will be treated as mixed supply. Thus what is important to understand and remember is the meaning of composite supply. An illustration of mixed supply of goods or services is:

  When we buy fruit basket for any ceremonious occasion, it usually consist of fruits, aerated drinks, canned juices, chocolates, dry fruits etc. These all individual components can also be sold separately at the rate applicable to each of them. Now when these all components are sold together the issue arises at what rate the seller shall charge tax. Now is this a composite supply or mixed supply? For seeking an answer, we shall see fulfilment of all the conditions as stipulated in the definition of composite supply.

  • a) Supply of 2 or more goods or services together; Fulfilled
  • b) In a natural bundle i.e., goods or services are usually provided together in normal course of business; NOT FULFILLED(as they can be sold separately too)
  • c) One of the good or service in such natural bundle shall be the principal/main service. NOT FULFILLED(as they can be sold separately too)
  
  

  Thus since all the conditions are not satisfied the above illustration is an instance of mixed supply and not composite supply.

  
  

  
  

  Rate of Tax at which Composite Supply/Mixed Supply shall be charged to tax:

  In case of composite supply, rate of tax applicable to the principal supply will be charged to the whole composite bundle. That is rate of GST applicable to transportation of passengers by rail will be charged by IRCTC on the booking of shatabdi ticket.

  
  

  In case of mixed supply, that rate of tax will be applicable, which is the highest among all the items of a mixed supply. In our example the rate of tax which is the highest among all the items(fruits, aerated drinks, canned juices, chocolates, dry fruits) will apply. 

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