Supply under the Goods and Service Tax means the supply of goods and services of any form by a person to another person for some consideration. This concept includes two types of supplies: mixed supply and composite supply. Though these words are often used interchangeably, there is a glaring difference between the two. The tax liability for both the supply as per the new GST rules is also different. Here is a brief description of both the types of supply:
Composite Supply under GST:
Under GST, a composite supply concept is very identical to the concept of naturally bundled services prevailing in the earlier service tax regime and would mean a supply consisting of two or more taxable supplies of goods or services or both, which are naturally bundled and supplied together by a taxable person to a recipient in the ordinary course of business, and one of which is a principal supply. It means that the items cannot be supplied separately and are generally sold as a combination.
Mixed Supply under GST:
As per Goods and Service tax, a mixed supply means a combination of two or more individual supplies of goods or services made together by a taxable person for a single price where such supply does not constitute a composite supply (that is the supply is not a case of naturally bundled services) and each of these items can be supplied separately and is not dependent on any other. Hence, if the supply is not a composite service, it is said to be a mixed supply.
Determination of tax liability:
The tax liability of mixed and composite supplies is determined in the following manner:
(a) In case of composite supply including more than two supplies and one of them being principal supply, the tax rate of the principal supply would hold true for the entire supply.
(b) If there is a mixed supply with the combination of two or more supply, then the total supply would attract the highest rate of tax.
Time of supply:
Time of supply in case of composite supply:
If the principal supply in case of composite supply is a service, then the composite supply will be considered as a supply of services and the provisions relating to time of supply of services will apply and if the supply of goods is the principal supply, the composite supply will qualify as supply of goods and accordingly, the provisions relating to time of supply of goods will apply.
Time of supply in case of mixed supplies:
If the highest rate of tax in a mixed supply belongs to a service, then the supply will be treated as the supply of services and hence, the provisions relating to time of supply of services would be applicable. Likewise, if the highest tax rate belongs to goods then the mixed supply will be treated as supply of goods and the provisions relating to time of supply of goods would be applicable.
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