MIXED 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.
PRINCIPLES DEFINING MIXED SUPPLY
IDENTIFICATION OF MIXED SUPPLY
In order to identify if the particular supply is a mixed supply, the first requisite is to rule out that the supply is a composite supply. A supply can be a mixed supply only if it is not a composite supply. It means if the transaction consists of supplies not naturally bundled in the ordinary course of business then it would be a mixed supply. Once the possibility of the transaction as a composite supply is ruled out, it would be a mixed supply attracting highest rate of tax.
EXAMPLE: A house is given on rent one floor of which is to be used as residence and the other for housing a printing press. Such renting for two different purposes is not naturally bundled in the ordinary course of business. Therefore, if a single rent deed is executed it will be treated as a service comprising entirely of such service which attracts highest liability of service tax. In this case, renting for use as residence is a negative list service while renting for non-residence use is chargeable to tax. Since the latter category attracts highest liability of service tax amongst the two services bundled together, the entire bundle would be treated as renting of commercial property.
DETERMINATION OF TAX LIABILITY OF MIXED SUPPLIES
The tax liability on a composite or a mixed supply shall be determined in the following manner:
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.
TIME OF SUPPLY IN CASE OF MIXED SUPPLIES
The mixed supply, involving supply of a service liable to tax at higher rates than any other constituent supplies, would qualify as supply of services and accordingly the provisions relating to time of supply of services would be applicable. Alternatively, the mixed supply, involving supply of goods liable to tax at higher rates than any other constituent supplies, would qualify as supply of goods and accordingly the provisions relating to time of supply of services would be applicable.
TIME OF SUPPLY OF GOODS
Time of supply of goods is earliest of:
1. Date of issue of invoice.
2. Last date on which invoice should have been issued.
3. Date of receipt of advance/ payment*.
For example:
Mr. X sold goods to Mr. Y worth Rs 1,00,000. The invoice was issued on 15th January. The payment was received on 31st January. The goods were supplied on 20th January.
Time of supply is earliest of –
1. Date of issue of invoice = 15th January
2. Last date on which invoice should have been issued = 20th January
Thus the time of supply is 15th January.
If an advance of Rs 50,000 is received by Mr. X on 1st January?
The time of supply for the advance of Rs 50,000 will be 1st January (since the date of receipt of advance is before the invoice is issued). For the balance Rs 50,000, the time of supply will be 15th January.
TIME OF SUPPLY FOR SERVICES
Time of supply of services is earliest of:
1. Date of issue of invoice
2. Date of receipt of advance/ payment.
3. Date of provision of services (if invoice is not issued within prescribed period)
Example:
Mr. A provides services worth Rs 20000 to Mr. B on 1st January. The invoice was issued on 20th January and the payment for the same was received on 1st February.
Firstly check if the invoice was issued within the prescribed time or not. The prescribed time is 30 days from the date of supply i.e. 31st January. The invoice was issued on 20th January. This means that the invoice was issued within a prescribed time limit.
The time of supply will be earliest of –
1. Date of issue of invoice = 20th January
2. Date of payment = 1st February
This means that the time of supply of services will be 20th January.
TIME OF SUPPLY UNDER REVERSE CHARGE
In case of reverse charge the time of supply for service receiver is earliest of:
1. Date of payment*
2. 30 days from date of issue of invoice for goods (60 days for services)
For example:
M/s ABC Pvt. Ltd undertook service of a director Mr. X worth Rs. 50,000 on 15th January. The invoice was raised on 1st February. M/s ABC Pvt Ltd made the payment on 1st May.
The time of supply, in this case, will be earliest of –
1. Date of payment = 1st May
2. 60 days from date of date of invoice = 2nd April
Thus, the time of supply of services is 2nd April.
TIME OF SUPPLY FOR VOUCHERS
Vouchers are an instrument where there is an obligation to accept:
- It as consideration
- Part consideration for a supply of goods or services
For vouchers, the time of supply is the date of issue of voucher, if the supply is identifiable at that point. Else, the time of supply for vouchers is the date of redemption of voucher.
OTHER TYPES OF SUPPLY
In case, it is not possible to determine the time of supply under any of the methods mentioned above, the time of supply would be determined as under:
- In a case where a periodical return has to be filed, the date on which such return is to be filed.
- In any other case, be the date on which the tax is paid.
Time of Supply for Interest, Late fee or Penalty
The time of supply for any interest, late fee or penalty for delayed payment as an addition consideration for the supplies made, is the date on which the supplier receives such addition in value.
Time of Supply in case Change in rate of tax
When there is a change in rate of tax, the time of supply shall be determined in the following manner:
1. Supply is made before the change in rate of tax
- Invoice is issued and payment is also received after the change in rate of tax – the time of supply will be the date of invoice or the date of payment – whichever is earlier.
- Invoice is issued before the change in rate of tax and payment is received after the change in rate of tax – the time of supply will be the date of invoice.
- Payment is received before the change in rate of tax and the invoice is issued after the change in rate of tax – the time of supply will be the date of receipt of payment.
2. Supply is made after the change in rate of tax
- Payment is received after the change in rate of tax but the invoice is issued before the change in rate of tax – the time of supply will be date of receipt of payment.
- Invoice is issued and payment is also received before the change in rate of tax – the time of supply shall be the date of receipt of payment or data of invoice – whichever is earlier.
- Invoice is issued after the change in rate of tax but the payment is received before the change in rate of tax – the time of supply shall be date of invoice.
JOIN THE CHANNEL ON TELEGRAM
CONNECT ON LINKEDIN