GST Mixed Supply
1. Mixed Supply Definition under GST
It is defined in the act as 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.
2. Is GST Mixed Supply to be Confused with Composite Supply under GST Section
A ‘composite supply’ is 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, naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply.
This could be well understood by an example. Let’s take an example of composite supply in GST say
|Goods are packed and transported with insurance||Analysis :
Similarly study of an example of mixed supply in gst would lead us to a better understanding of GST mixed supply. Say for example
|A supply or package consisting of canned foods, sweets, chocolates, cakes, dry fruits, aerated drinks and fruit juices, supplied for single price||Analysis : In the given case
Then the given case is a classic example of mixed supply under GST.
3. Why the Two Supplies are Considered Important in GST
GST council has defined specific rates for goods and services. Sometimes supply of a good and service may be connected or may be done together even though not connected.
Lets say an Air Conditioner unit supplied along with installation services are also supplied along with it. The GST Act defines how such supply must be rated. Thereby the concept of composite supply and mixed supply becomes important. It helps to determine the correct GST rate and provides uniform tax treatment under GST for such supplies.
4. Goods and Service Tax Rate for a Mixed Supply in GST
The rates for both supplies are to be determined as follows –
|GST rate for composite supply||In respect of composite supply the principal item is to be taken for the purpose of tax. (Reading by the definition discussed above)
The tax rate applicable in respect of composite supply would be the tax rate applicable on the principal item.
|GST rate for mixed supply||In respect of mixed supply the item with highest rate is to taken for the purpose of tax.
The tax rate applicable in respect of mixed supply would be the highest rate applicable to the supply which is offered in combination there of for a single price.