Mixed and Composite Supply under CGST Act, 2017

The Indian economy is a growing market, which is attracting a lot of investment from both national and international investors. The Indian tax system is also evolving to keep up with the changing market trends and the introduction of the Goods and Services Tax (GST) is a testament to this. The GST has replaced several indirect taxes in India and has brought about a uniform tax system across the country. The GST Act, 2017, provides for the classification of supplies as either goods or services. However, there are certain supplies that cannot be classified as either goods or services and are referred to as mixed or composite supplies.

What is Mixed Supply?

A mixed supply is a supply that consists of two or more taxable goods or services or both. The value of such a supply is determined by the value of each of the goods or services that make up the supply. For example, a supply of a packaged tour that includes accommodation and transportation would be considered a mixed supply.

What is Composite Supply?

A composite supply is a supply that is made up of two or more taxable goods or services or both, which are naturally bundled and supplied together in the ordinary course of business. The value of such a supply is determined by the value of the goods or services that make up the supply. For example, a supply of food and drink in a restaurant would be considered a composite supply.

Classification of Mixed and Composite Supplies under CGST Act, 2017

The CGST Act, 2017, provides for the classification of mixed and composite supplies as follows:

1. Mixed Supply: A mixed supply is classified as a supply of goods or services or both, and the tax is levied on the value of each of the goods or services that make up the supply.

2. Composite Supply: A composite supply is classified as a supply of goods or services or both, and the tax is levied on the value of the goods or services that make up the supply.

Examples of Mixed and Composite Supplies

Some examples of mixed and composite supplies are as follows:

1. Mixed Supply: A supply of a packaged tour that includes accommodation and transportation would be considered a mixed supply. The value of the supply would be determined by the value of each of the goods or services that make up the supply.

2. Composite Supply: A supply of food and drink in a restaurant would be considered a composite supply. The value of the supply would be determined by the value of the goods or services that make up the supply.

Taxation of Mixed and Composite Supplies under CGST Act, 2017

The taxation of mixed and composite supplies under the CGST Act, 2017, is as follows:

1. Mixed Supply: The tax on a mixed supply is levied on the value of each of the goods or services that make up the supply. The tax rate applicable to each of the goods or services that make up the supply would be determined based on the classification of the goods or services under the GST Act, 2017.

2. Composite Supply: The tax on a composite supply is levied on the value of the goods or services that make up the supply. The tax rate applicable to the goods or services that make up the supply would be determined based on the classification of the goods or services under the GST Act, 2017.

Conclusion

In conclusion, the GST Act, 2017, provides for the classification of supplies as either goods or services. However, there are certain supplies that cannot be classified as either goods or services and are referred to as mixed or composite supplies. The taxation of mixed and composite supplies under the CGST Act, 2017, is determined based on the value of each of the goods or services that make up the supply, and the tax rate applicable to each of the goods or services that make up the supply would be determined based on the classification of the goods or services under the GST Act, 2017.