Composite and mixed supply in revised GST law

Relevance of composite and mixed supply in revised draft of Model GST law: Composite and mixed supply both of these terms have been inserted into the definition of supply. Section 3 of the Model GST law covers the Composite and mixed supply in its sub clause 5. It provides for the taxability of composite supply as the supply of principal goods/services. In case of mixed supply the highest tax rate will be applicable on the entire supply. Now question arises that what is a composite supply and what is a mixed supply?

Section 2(27) of the revised Model GST draft law covers the definition of composite supply. 

“composite supply” means a supply made by a taxable person to a recipient comprising two or more supplies of goods or services, 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;
Illustration : 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.

It is clear form the above definition that composite supply will be there if the goods/services  are required to be bundled and supplied to gather in ordinary course of business. One of these composite goods/services  should be principal goods/services  E.g TV and remote. But if the goods are not bundled together in ordinary course then they will not be treated as composite supply. For example Samsung is offering an headphone with their latest phone but other companies may not be offering the same. In this case it is their own sales strategy to supply headphone with phone and not a business practice.

Mixed Supply: Section 2(66) of Model GST law defines the term mixed supply.

“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;
Illustration: 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.

Mixed supply will cover the transaction where the price is single but the goods/services are individual supply. Mixed supply can be a supply of different goods or services or combination of Goods and services.