This is a case of composite supply where 2 or more supplies are made. You should refer section 8, the section is very well explained with similar example.
To answer your question you should charge tax considering this as supply of machine, since supply of machine is the principal supply and installment is secondary.
As per above section, in case of composite/mixed supply the liability should be determined as:
- 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; and
- A mixed supply comprising two or more supplies shall be treated as a supply of that particular supply which attracts the highest rate of tax.
So you should consider liability based on composite and mixed supplies. In first case it will be the principal supply and in second supply with highest rate of tax.
The difference between a composite and mixed supply is that in case of mixed supply items supplied are independent of each other.
For example, a pack of different kind of chocolates or foods items is a mixed supply and can be sold independent of each other.
chatCommentsSir, If we sell 2-3 different products ( one is GST@5%; another GST@12% and another GST@18%) in a single invoice; will this be treated as mixed supply and hence highest rate of GST@18% to be charged for each product ? - Basheer PMNo sir. Mixed supply example is gift pack where different items are bundled together and single MRP is fixed. If you are billing them separately then it is not a mixed supply. - Pulkit Sharmasir have a query i am a registered seller from up. i sell material worth 1 lakh to an unregistered dealer in maharashta. transportation cost is extra. the dealer in Maharashtra tells me to pay freight to the tranporter (suppose 5,000), which he will deposit separately in my account. now what would be the sale consideration / invoice vale whether 1,00,000 or 1,05,000/- and do i have to pay 5 % of 5,000/- which is the transportation charge. - akash jain