Section -8 CGST ACT:- Understanding On (Composite and Mixed Supply).
Sec -8 – Talks about the Tax liability in case of COMPOSITE AND MIXED SUPPLIES:-
The tax liability on a composite or a mixed supply shall be determined in the following manner,namely:—
(a) a composite supply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply;
(b) a mixed supply comprising two or more supplies shall be treated as supply of that particular supply which attracts the highest rate of tax.
SEC 2(30)-My Understanding on this section is:- Composite supply” means a supply made by a taxable person to a recipient consisting 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.
So in case of composite supply we need to check following points:- Taxable person, supply must be consist of two or more taxable supplies of Goods / services / goods and services or any combination and must Naturally Bundled, Single Supply and Ordinary course or business.
For example :- 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. So in this case the rate of GST will be the rate of Principal product , and that would be charged in the supply made.
My Understanding on Section2(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,
So, in other words if there is supply of two or more individual supplies which in not naturally bundled and supplied to a taxable person for a single price and also which is not a Composite supply, will be treated as Mixed Supply. And in this case the rate of GST will be higher of GST rate. i.e. if there are five different products and having different GST rate then we need to charge the highest GST rate in the single invoice issued. One important thing should always keep in mind is Word Supply , so whenever you see word supply then the first thing you need to Recall Sec-7 and all its Provisions and related Schedules.
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