Concept of Composite Supply and Mixed Supply Under GST

Concept of Composite Supply and Mixed Supply Under GST

GST has already Introduced Composite supply before meanwhile Mixed Supply is an entirely new Concept. The concept of both composite supply and mixed supply will cover the supplies which are made together regardless of whether they are related to each other or not. On the surface, it might look like both Composite supplies and Mixed Supplies are similar to each other as the supply of two or more goods or services could be either of one i,e; Composite supply or Mixed Supply. But despite these similarities, both are different.

What is Composite Supply?

A Composite Supply is a supply comprising a combination of two or more goods or services, which are sold as a combination set and not standalone. These supplies are considered bundled and hence are supplied along with each other during the business which is why they cannot be sold out separately. Furthermore, every composite supply has a principal supply that is said to be the main product or service in the combination which is primarily wanted by the consumers/buyers.

The rest of the supply/supplies are considered supporting elements to add to the value of the principal supply.

What is Mixed Supply?

A mixed supply under GST is a supply of two or more goods or services that are presented to be for purchase together but could also be sold individually if that is what the consumer requires. Although it is a combination of multiple goods or services for a price of a single, these goods or services can also be sold separately and are not codependent. Also, it is to note that in Mixed Supply, the Tax rate of the Item with a higher GST rate will be levied on the entire combination whether sold separately.

Difference between Composite Supply VS Mixed Supply

The major difference between Composite Supply Vs Mixed Supply is based on the existence of the principal item. For Composite supply one of the two or more goods or services is fixed to be the principal good or service.  While in Mixed Supply there is no Principal good or service however the item/service with a higher GST rate is used to determine the tax rate for all the goods or services under Mixed Supply.

Also, another difference between both would be that under Composite Supply the combination of products or services cannot be sold separately, they are naturally bundled and are sold together with the principal item. On the other hand, under Mixed Supply all the goods or services can be sold individually just keeping the Tax rate to be the highest rate applied to a good or service in the set.

BY: Admin Tax4wealth

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