/** * The main template file * * This is the most generic template file in a WordPress theme * and one of the two required files for a theme (the other being style.css). * It is used to display a page when nothing more specific matches a query. * E.g., it puts together the home page when no home.php file exists. * * @link https://developer.wordpress.org/themes/basics/template-hierarchy/ * * @package WordPress * @subpackage Tally * @since 1.0.0 */ ?>
On certain occasions, two or more goods, or a combination of goods and services, are supplied together. This generally happens, due to either of the following reasons:
Under the Service Tax regime, this mechanism was called as a Bundled Good or Service – which implied the rendering of a goods or services with another element of goods or services or both.
Under GST, all supplies which are bundled with two or more supplies of goods or services or combination of goods and services are classified, with distinct characteristics as:
It is important thus to understand the implications of composite supply vs. mixed supply, especially in the GST era.
The supply of two or more individual supplies of goods or services, or any combination of goods and services, by a taxable person, for a single price, is called a Mixed Supply. In Mixed Supply, the combination of goods and/or services are not bundled due to natural necessities, and they can be supplied individually in the ordinary course of business.
A Mixed Supply example could be a kit – which contains a tie, a watch, a wallet and a pen - which could be bundled and priced together. However, each of these items can always be supplied individually, and hence this supply will be a Mixed Supply.
The GST rate on mixed supply will be the highest GST rate applicable on the goods or services included in the given combination of the mixed supply.
The supply of two or more supplies of goods or services by a taxable person, which comprises of a combination of goods and services naturally bundled and supplied together in the ordinary course of business, is called as a Composite Supply.
In other words, a Composite Supply comprises goods and services which are bundled owing to natural necessities. The elements in a composite supply of goods and services are generally bifurcated as:
A Composite Supply example could be – a 5 star hotel in Mumbai providing a stay package with breakfast. This will be a Composite Supply as the package of accommodation facilities and breakfast is a natural combination in the ordinary course of business for a hotel. In this case, the hotel accommodation is the principal supply, and breakfast is the dependent supply.
The GST rate on Composite Supply will be equal to the GST rate applicable on the principal supply of such goods and services, included in the composite supply.
Given the renewed categorisation of supplies as mixed supply and composite supply under GST , businesses will need to relook all their potential bundled goods and services. It is important for businesses to clearly understand composite supply vs. mixed supply, their tax implications and accordingly operate to fulfil the desired objective of bundling goods and services.
GST Changes – Joint Development Agreement Developer’s Point of View