Page 22 - Ch2_Supply

CCP 02.09.33.00
Explain the composite supply & mixed supply. If a trader launches a package sales for marriage

containing double bed, refrigerator, washing machine, wooden wardrobe at a single rate. He is issuing
invoice showing value of each goods separately. Whether this is case of mixed supply or composite
supply. Explain. [CA Inter Jul 21 Exams]
Answer:-

Legal Provision:-
Ü As per section 2(30) of CGST Act, “Composite supply”-
Ø Consists of two or more taxable supplies of goods &/or services,
Ø Such supplies are naturally bundled,

Ø Such supplies are supplied in conjunction with each other,
Ø They are supplied in the ordinary course of business &
Ø Have one supply as principal supply.
Ü As per section 2(74) of CGST Act, “Mixed supply”-
Ø Consist of two or more individual supplies of goods &/or services,

Ø They can be supplied independently, still supplied together by the taxable person,
Ø Supplied for a single price &
Ø Is not naturally bundled i.e. it is not a composite supply.

Discussion & Conclusion:-
Ü Items such as double bed, refrigerator, washing machine & wooden wardrobe are not naturally bundled &
Ü The invoice for the supply shows separate values for each item i.e., the package is not supplied for a single
price.
Ü Thus, supply of such items as a package will neither constitute a composite supply nor a mixed supply.

Ü Thus, the various items of the package will be treated as being supplied individually.
Note by ICAI:

Ü The question specifies that the various items are supplied at a ‘single rate’. The “single rate” expression is
construed as single rate of tax in the above answer.
Further, the “single rate” may also be construed as single price as given in the below mentioned answer.
Ü Items such as double bed, refrigerator, washing machine and wooden wardrobe are not naturally bundled.
Therefore, supply of such items as a package will not constitute composite supply. Further, a single price
has been charged for the package.

Ü Consequently, supply of such items as a package will be treated as mixed supply.

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