Mixed Supply & Composite Supply under GST

Understanding the difference between Mixed Supply and Composite Supply under GST is very important for every commerce student, accountant, business owner, and GST practitioner. A small classification mistake can lead to paying the wrong tax rate, penalties, and compliance issues. That’s why this topic is a core part of every taxation course, accounting course, and GST certification Course in India.

In this blog, we will clearly explain the meaning, features, tax treatment, and practical examples of mixed and composite supply under the Goods and Services Tax (GST).

What is Composite Supply under GST?

As per the GST law, a Composite Supply means a supply consisting of two or more taxable goods or services (or both), which are naturally bundled and supplied together in the ordinary course of business, where one of them is a principal supply.

Key Features of Composite Supply:

• Two or more goods or services are supplied together.

• They are naturally bundled in normal business practice.

• One supply is the principal supply.

• The tax rate of the principal supply applies to the entire bundle.

What is Principal Supply?

Principal supply is the main element of the bundle. Other supplies are ancillary (supporting) to it.

Example of Composite Supply

1. Hotel Accommodation with Complimentary Breakfast

   • A hotel room is booked with free breakfast.

   • The principal supply is hotel accommodation.

   • Breakfast is incidental.

   • GST will be charged as per the rate applicable to hotel accommodation.

2. Goods with Freight and Insurance

   • A seller supplies goods and charges freight and insurance.

   • The principal supply is goods.

   • Freight and insurance are ancillary.

   • GST rate applicable to goods will apply to the total amount.

In an accounting and GST course, students learn how identifying the principal supply helps in correct tax calculation and compliance.

What is Mixed Supply under GST?

A Mixed Supply means two or more individual supplies of goods or services made together for a single price, which are not naturally bundled and can be supplied separately.

Key Features of Mixed Supply:

• Two or more independent supplies.

• Not naturally bundled.

• Supplied together for a single price.

• The highest GST rate among the items applies to the entire bundle.

Example of Mixed Supply

1. Festival Gift Hamper

   • A Diwali gift pack contains chocolates, dry fruits, juice, and sweets.

   • Each item can be sold separately.

   • They are combined for a single price.

   • GST rate of the item with the highest tax rate will apply to the entire hamper.

2. Combo Offer in Retail

   • Buy a shirt and get a watch in a single combo offer.

   • Both items are independent.

   • Not naturally bundled.

   • The highest GST rate applicable among them will apply to the full price.

This concept is very important for those pursuing a GST practitioner course or GST certification course India, as incorrect classification may increase tax liability.

Difference Between Composite Supply and Mixed Supply

This comparison is frequently discussed in the best GST course online and GST certification course modules because it directly impacts tax planning and invoicing.

Tax Treatment under GST

1. Tax Treatment of Composite Supply

The entire supply is taxed at the rate applicable to the principal supply.

For example:
If goods (18% GST) are supplied with packing and freight, and the goods are the principal supply, then the entire amount will be taxed at 18%.

2. Tax Treatment of Mixed Supply

The entire bundle will be taxed at the highest GST rate applicable among the items in the package.

For example:
If a gift hamper contains:

• Item A (5% GST)

• Item B (12% GST)

• Item C (18% GST)

The entire value will be taxed at 18%.

This is why businesses must carefully structure promotional schemes and combo offers. Proper knowledge gained through a GST training course fees can actually save businesses from unnecessary tax burdens.

Importance for Businesses

Correct classification between mixed and composite supply is essential because:

• It ensures proper GST compliance.

• Avoids penalties and notices.

• Helps in accurate invoice preparation.

• Prevents excess tax payment.

• Supports better pricing strategies.

For example, if a supply is wrongly treated as composite instead of mixed, the business might apply a lower tax rate and later face tax demand with interest and penalty.

That’s why professionals enrolled in an accounting course or GST practitioner course are trained to analyze real-world case studies and practical scenarios.

Practical Scenarios in Business

Scenario 1: Mobile Phone with Charger

When you buy a mobile phone with a charger in the same box, it is generally considered a composite supply because the charger is naturally bundled with the phone. The GST rate of the phone applies.

Scenario 2: Restaurant Combo Meal

A combo meal with a burger, fries, and soft drink may be treated as a composite if it is naturally bundled as part of the restaurant service.

Scenario 3: Corporate Gift Basket

A corporate gift basket with unrelated items sold for one price is a mixed supply and will attract the highest GST rate.

These practical examples are commonly covered in a GST and taxation course near me searches, as students look for hands-on training in GST compliance.

Why Students Must Learn This Topic

Mixed and composite supply is a core topic in:

• Taxation course

• Accounting course

• Accounting and GST course

• GST Certification Course

• GST practitioner course

• Best GST course online

Understanding this concept improves your ability to:

• Prepare GST returns correctly

• Issue proper tax invoices

• Advise clients on tax planning

• Work confidently in accounting firms

• Build a career as a GST consultant

Conclusion

Mixed Supply and Composite Supply under GST are crucial concepts that directly impact tax calculation and compliance. The main difference lies in whether the supplies are naturally bundled and whether a principal supply exists.

• Composite Supply → Tax rate of principal supply.

• Mixed Supply → Highest tax rate among the items.

For students and professionals pursuing an accounting and GST course, mastering this topic is essential for career growth in taxation and finance. Whether you enroll in the best GST course online or search for a GST and taxation course near me, ensure that the curriculum covers practical case studies on mixed and composite supply.