The tax liability on a composite or a mixed supply shall be determined in the following manner, namely:
(a) A composite supply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply.
(b) A mixed supply comprising two or more supplies shall be treated as a supply of that particular supply which attracts the highest rate of tax.
Composite Supply
(Tax rate is applicable the tax rate of Principal Supply)
As per section 2(30) “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;
Comprising
- Two or more Taxable Supplies,
- Which are naturally bundled and supplied in conjunction with each other,
- in the ordinary course of business,
- One of which is a Principal supply.
It should be a combination of two or more goods or services or both, and this combination is normally supplied by the industry to its customers in the ordinary course. The most important thing is one supply among these should be Principal supply and other supplies depended on that main Principal supply.
Mixed Supply
(Tax rate is applicable the higher tax rate)
Comprising
*As per sec 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.
*Individual Supplies means independent supplies of each other and are not naturally bundled.