Page 8 - Chap1 Charge of Tax & Concept of Supply

06. Section 8:- Composite Supply & Mixed Supply
Q.10: Satyamev Printers is a printing house registered under GST. It receives an order for printing 5000
copies of a book on yoga and meditation authored by a well-known yoga guru. The content of the book is to be
provided by the yoga guru to Satyamev Printers. It is agreed that Satyamev Printers will use its own paper to
print the said books.
You are required to determine the rate of GST applicable on supply of printed books by Satyamev Printers
assuming that rate of GST applicable on services is 18% whereas the rate of GST applicable on supply of
goods is 12%. [Study Mat] [RTP Nov 19- Similar]
Answer:- The supply of printed books by Satyamev Printers will be treated as a composite supply, with
printing services as the principal supply. Hence, the applicable GST rate will be 18%.
Legal Provisions:
Ü Composite Supply (Sec 2(30) of CGST Act, 2017): A composite supply consists of two or more taxable
supplies of goods or services, naturally bundled and supplied together in the ordinary course of business,
where one is the principal supply.
Ü CBIC Clarification on Printing Industry: When a printing house uses its own paper and other materials to
print books, while the content is provided by the customer, the principal supply is considered to be printing
services.
Ü Taxability u/s 8 of CGST Act, 2017: A composite supply is taxed at the rate applicable to the principal supply.
Since printing services are the principal supply, the applicable GST rate will be 18% (rate applicable to
services).
Conclusion: The supply of printed books by Satyamev Printers is a composite supply, where printing services is
the principal supply. GST @18% will apply (as per service rate), instead of the 12% GST applicable to books as
goods.

Q.11: Shivaji Pvt. Ltd., a registered supplier, supplies the following goods and services for construction of
buildings and complexes -
- excavators for required period at a per hour rate
- manpower for operation of the excavators at a per day rate
- soil-testing and seismic evaluation at a per sample rate.
The excavators are invariably hired out along with operators. Similarly, excavator operators are supplied
only when the excavator is hired out.
For a given month, the receipts (exclusive of GST) of Shivaji Pvt. Ltd. are as follows:
- Hire charges for excavators - ` 18,00,000
- Service charges for supply of manpower for operation of the excavator - ` 20,000
- Service charges for soil testing and seismic evaluation at three sites - ` 2,50,000
Compute the GST payable by Shivaji Pvt. Ltd. for the given month.
Assume the rates of GST to be as under:
- Hiring out of excavators – 12%
- Supply of manpower services and soil-testing and seismic evaluation services – 18%. [Study Mat]
Answer:- Computation of GST payable by Shivaji Pvt. Ltd.
Particulars Value of Rate of GST
supply (`) GST (`) Payable (`)

Hiring charges for excavators 18,00,000 12% 2,16,000

Service charges for supply of manpower for operation of excavators [Note 1] 20,000 12% 2,400
Service charges for soil testing and seismic evaluation [Note 2] 2,50,000 18% 45,000
GST liability 2,63,400
Notes:
1. Since the excavators are invariably hired out along with operators and excavator operators are supplied only
when the excavator is hired out, it is a case of composite supply under section 2(30) of CGST Act, 2017,
wherein the principal supply is the hiring out of the excavator.

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