Ppt on Composite supply v/s Mixed supply by CMA Anil Sharma

The ppt on composite supply v/s Mixed Supply describes the difference between the composite supply and mixed supply with the provisions under the regime of GST.

Supplies

Supplies of Goods and Services are clearly defined under GST,

Similarly, Rates and Place of Supply rules for each and every goods/services is finalized.

But in business practices, all supplies will not be such simple and clearly identifiable supplies. Some of the supplies will be a combination of goods or

combination of services or combination of goods and services both,

Therefore, the GST Law identifies composite supplies and mixed supplies and provides certainty in respect of tax treatment under GST for such supplies.

Composite supply

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;

Section-2 (90)

“principal supply” means the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary.

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 a principal supply.

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Some more examples of Composite Supplies

a. Goods are packed/repacked, loaded/unloaded, staked/re-staked and transported/ transshipped with insurance.

b.Booking a Rajdhani train ticket which includes meal and insurance also,

c. A works contract: It is a classic example of composite supply.

But to avoid the confusion under earlier tax law, GST Act clearly clarifies works contract as a supply of service with specific tax rates

d. Restaurant business provides a bundled supply of preparation of food and serving the same

Mixed supply

Section 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;

Illustration: A supply of a package consisting of canned foods, sweets, chocolates, cakes, dry fruits, aerated drinks 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.