DIFFERENCE BETWEEN COMPOSITE AND MIXED SUPPLY
Composite supply means a supply is comprising two or more goods/services, which are naturally bundled and supplied in with each other in the ordinary course of business, one of which is a principal supply.
It means that the items are generally sold as a combination. The items cannot be supplied separately.
A supply of goods and/or services will be treated as composite supply if it fulfills the following criteria:
- Supply of two or more goods or services together AND
- It is a natural bundle,i.e., goods or services are usually provided together in the normal course of business.
- They cannot be separated.
- Goods are packed and transported with insurance. The supply of goods, packing materials, transport and insurance is a composite supply. Insurance, transport cannot be done separately if there are no goods to supply. Thus, the supply of goods is the principal supply.
- Buying a Dry Fruit Gift Box for Diwali. It includes dry fruits, a box and a wrapper. Box and wrapper cannot be sold individually without the main content which is dry fruit. This is composite supply.
Mixed supply under GST means a combination of two or more goods or services made together for a single price. Each of these items can be supplied separately and is not dependent on any other.
Under GST, a mixed supply will have the tax rate of the item which has the highest rate of tax.
Example: Buying a Christmas package consisting of cakes, aerated drinks, chocolates, Santa caps and other gift items. Each of these items can be sold separately and are not dependent on each other. This is mixed supply.
The difference between Composite and Mixed Supply is as follows:
|BASIS OF DIFFERENCE||COMPOSITE SUPPLY||MIXED SUPPLY|
|SUPPLIES||It is a supply in Which goods or services are naturally bundled.||It is a supply in which goods and services are not naturally bundled.|
|JOINTLY||Goods or services are Supplied in conjunction with each other.||Although, the supply can be made independently, still supplied together.|
|PRINCIPAL SUPPLY||Here, one of goods is a principal supply.||Principal supply cannot be identifiable.|
|RATE OF GST||GST shall be charged at the rate, as applicable on the principal supply||GST shall be charged at the rate applicable to the supply, which attracts the highest rate|
|EXAMPLE||Charger supplies with Mobile Phone||Gift of Chocolates and sweets|
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