Page 9 - Chap1 Charge of Tax & Concept of Supply

As per section 8, the composite supply is treated as the supply of the principal supply. Therefore, the
supply of manpower for operation of the excavators will also be taxed at the rate applicable for hiring out of
the excavator (principal supply), which is 12%.
2. Soil testing and seismic evaluation services being independent of the hiring out of excavator will be taxed
at the rate applicable to them, which is 18%.

Q.12: Mrs. Kajal, a registered supplier of Jaipur (Rajasthan), has made following supplies in the month of
January:
(i) Supply of a laptop along with the laptop bag to a customer of Mumbai for ` 55,000 (exclusive of GST).
(ii) Supply of 10,000 kits (at ` 50 each) amounting to `5,00,000 (exclusive of GST) to Ram Fancy Store in
Kota (Rajasthan). Each kit consists of 1 hair oil, 1 beauty soap and 1 hair comb.
(iii) 100 kits are given as free gift to Jaipur customers (all unrelated) on the occasion of Mrs. Kajal's
birthday. Each kit consists of 1 hair oil and 1 beauty soap. Cost of each kit is ` 35. Input tax credit has not
been taken on the goods contained in the kit.
(iv) Event management services provided free of cost to her brother (wholly dependent on her) for his son's
marriage function in Indore (Madhya Pradesh). Cost of providing said services is ` 80,000.
(v) 1,400 chairs and 100 coolers hired out to Function Garden, Ajmer (Rajasthan) for ` 3,30,000 (exclusive of
GST) including cost of transporting the chairs and coolers from Mrs. Kajal's godown at Jaipur to
Function Garden, Ajmer. Since Mrs. Kajal is not a GTA, transportation services provided by her are
exempt vide Notification No. 12/2017 CT (R) dated 28.06.2017.
Assume rates of GST to be as under:-
S.No. Particulars Rate of GST
1 Laptop 18%

2 Laptop Bag 28%
3 Hair Oil 18%
4 Beauty Soap 28%
5 Hair Comb 12%
6 Event Management Services 5%
7 Service of renting of chairs and coolers 12%

8 Transportation services 5%
From the above information, examine each of the above supplies made by Mrs. Kajal for the month of
January and determine the rate of GST applicable on the same. [Study Mat]
Answer:-

S.No. Particulars Rate of GST
1 Supply of laptop bag along with laptop to Mumbai customer 18%
[Being naturally bundled, supply of laptop bag along with the laptop is a composite supply
which is treated as the supply of the principal supply [viz. laptop] in terms of section 8(a).
Accordingly, rate of principal supply, i.e. laptop will be charged.]
2 Supply of kits to Ram Fancy Store 28%
[It is a mixed supply and is treated as supply of that particular supply which attracts highest
tax rate [viz. beauty soap] in terms of section 8(b).]
3 Free gifts to customers Nil
[Cannot be considered as supply under section 7 read with Schedule I as the gifts are given to
unrelated customers without consideration.]

4 Event management services provided free of cost to her brother [who is a related 5%
person] for his son's marriage. Thus, said services shall fall within the purview of Schedule
I and shall be treated as supply even if made without consideration. Since it is an individual
supply, it will be taxed at the rate applicable on said service.

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