Mixed and Composite Supply under GST

Composite Supply - If supply involves more than one goods and / or services which are naturally bundled together: These are referred to as composite supply of goods and / or services. It shall be deemed to be a supply of those goods or services, which constitutes the principal supply therein.

Example - 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 the principal supply. This implies that the supply will be taxed wholly as supply of goods.

Mixed Supply - If it involves supply of more than one goods and / or services which are not naturally bundled together: These are referred to as mixed supply of goods and / or services. It shall be deemed to be a supply of that goods or services therein, which are liable to tax at the highest rate of GST

Example - 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. This implies that the supply will be taxed wholly as supply of those goods which are liable to the highest rate of GST.

In this example if all goods are taxed at different rates individually, the whole supply will be taxed at the highest rate among all these items.

To understand the different more clearly, you can refer the table given below which shows major parameters based on which we can differentiate between Composite and Mixed Supply –

I hope this article will help you in distinguishing between Composite and Mixed supply. See our other articles for regular updates and information on GST.