Example

Determine whether it is mixed or composite supply .
1. Selling of different forms of scraps goods including Scrap of Tin, scrap of plastic and scrap of iron for lump sum single price for Rs 50000.
2. Booking of air conditioned railway ticket along with meals for Rs 3500.
3. Transport service with insurance of goods for Rs 35000.

Answer

Composite supply according to section 2(30) means a supply comprising two or more goods/services, which are naturally bundled and supplied with each other in the ordinary course of business, one of which is a principal supply. The items cannot be supplied separately.

Whereas mixed supply according to section 2(74) under GST means two or more individual supplies of goods or services, or any combination, made together with each other by a taxable person for a single price. Each of these items can be supplied separately and none is dependent on any other and there is no principal supply.
Taxability under GST on composite and mixed supply.

In composite supply:- supply is treated as supply of principal supply and rate of taxation is determined according to the rate applicable on principal supply.
In Mixed supply:- it is deemed as supply of a particular supply that attracts highest tax rate.


In view of the above provisions:
1. Sale of different forms of scraps is Combination of individual supplies. Therefore it is NOT composite supply, will be treated as mixed supply. Further HSN of scrap of TIN 8002 @ 18% , scrap of Iron HSN 7204 @ 18% and Scrap of plastic HSN 3915 @ 5%. Therefore the supply of Rs 50000 is deemed as supply of Iron under HSN 7204 @ 18% or can be deemed as supply of waste of Tin under HSN 8002 @ 18%.

2. It is a composite supply where the products cannot be sold separately. You will not buy just the meal in railway and not the ticket. The transportation of passenger is, therefore, the principal supply. Thus, tax liability under GST is the rate of tax of supply relating to transportation of passengers by railway.

3. The supply of transportation service with insurance is a composite supply in the ordinary course of business and transportation service is the principal supply. This implies that the supply will be taxed wholly as transportation service.