Page 20 - Ch2_Supply

CCP 02.08.28.00
State Government has exclusive power to notify a transaction to be supply of goods or services.”

Discuss the correctness of the statement. [CA Final 2018]
Answer:-
Ü The said statement is not correct.
Ü State Government can notify a transaction to be supply of goods or services but only on the

recommendations of the GST Council.
Ü Further, Central Government or State Government, both on the recommendations of the GST Council,
can notify an activity to be:-
Ø supply of goods and not supply of services or

Ø supply of services and not supply of goods or
Ø neither a supply of goods nor a supply of services.

09. Section 8: Composite Supply & Mixed Supply

CCP 02.09.29.00
Determine whether the following supplies amount to composite supplies:-
(a) A hotel provides 4 days-3 nights package wherein the facility of breakfast and dinner is provided
along with the room accommodation.

(b) A toothpaste company has offered the scheme of free Soap along with the toothpaste.
Answer:-
Legal Provision:-
As per section 2(30) of CGST Act, “Composite supply”-

Ü Consists of two or more taxable supplies of goods &/or services,
Ü Such supplies are naturally bundled,
Ü Such supplies are supplied in conjunction with each other,
Ü They are supplied in the ordinary course of business &

Ü Have one supply as principal supply.
Discussion & Conclusion:- In view of the same,
(a) Since, supply of breakfast and dinner with the accommodation in the hotel are naturally bundled, said
supplies qualify as 'composite supply'.
(b) Since, supply of soap along with the toothpaste are not naturally bundled, said supplies do not qualify

as 'composite supply'.

CCP 02.09.30.00

Composite supply is treated as supply of that particular goods or services which attracts the highest
rate of tax, for the purpose of considering tax liability. Examine the validity of the statement.
[Study Mat]
Answer :-
Ü The statement is not correct.

Ü For considering tax liability, composite supply is treated as supply of the principal supply.
Ü It is the mixed supply that is treated as supply of that particular goods or services which attracts the
highest rate of tax.

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