Mixed Supply & Composite Supply

Persons Registered under Section 10

Composite supply: Composite supply means a supply comprises two or more goods/services, which are
naturally bundled and supplied in with each other in the ordinary course of business, one of which is a
principal supply. It means that the items are generally sold as a combination.
The items cannot be supplied separately.

How to determine: A supply of goods and/or services will be treated as composite supply if it full fills the
following criteria:

 Supply of 2 or more goods or services together AND

 It is a natural bundle, i.e., goods or services are usually provided together in the normal course of
business.

 They cannot be separated.

Rate of Tax:The tax rate of the principal supply will apply on the entire supply.
Example: Goods are packed and transported with insurance. The supply of goods, packing materials, transport
and insurance is a composite supply. Insurance, transport cannot be done separately if there are no goods to
supply. Thus, the supply of goods is the principal supply.
Tax liability will be the tax on the principal supply i.e., GST rate on the goods.
If the second condition is not fulfilled it becomes a mixed supply.
Sales in the same state
Reverse charge will applicable to composite dealer also.
As per Rule 7 Rates Applicable
(1)Tax Rates Manufacturers, Other than Manufacturers of such goods as may be notified by the Govt.
ONE PER CENT.
(Sec10 (a) One per cent of the turnover in state or turnover in Union territory in case of Manufacturers)
(2)Suppliers making supplies reffered in clause (b) paragraph 6 of Schedule II.
(Sec10 (b) Two and half per cent of the turnover in state or turnover in Union territory in case of clause (b)
paragraph 6 of Schedule II.
TWO AND HALF PER CENT.
(b)Supply, by way of or as part of any service or in any other manner what so ever, of goods, being food or any
other article for human consumption or any drink (other than alcoholic liquor for human consumption), where
such supply or service is for cash, deferred payment or other valuable consideration.

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Supply:
The expression “supply” simply means all forms of supply of goods/services. It is made for a consideration
during the course of business and includes the following:

 Sale, Transfer, Barter, Exchange, License, Rental, Lease, Disposal,

 Import of services for a consideration (if even it is not in the course or furtherance of business)

Certain activities specified in Schedule I of GST Act will also be treated as supply.