What is the difference between MIXED SUPPLY and COMPOSITE SUPPLY in GST ?

The distinction between Mixed Supply and Composite Supply should be clearly understood to define the Value of Supply.

COMPOSITE SUPPLY  :  A Composite Supply means a supply made by a taxable person to a

recipient consisting of two or more taxable supplies of goods or services  which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply.

In Simple words, there is a principal good or service which needs other supporting services to be fulfilled correctly. In this case, the supporting services are essential to the principal supply. Examples of such supporting services are Packaging, Transportation, Freight Insurance etc.

Example— Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a principal supply.

The following composite supplies shall be treated as a supply of services, namely:—

·         Works contract as defined in clause (119) of section 2

·         Supply, by of goods, being food or any other article for human consumption or any drink (other than alcoholic liquor for human consumption), where such supply or service is for cash, deferred payment or other valuable consideration.

MIXED SUPPLY  :  A mixed supply implies that two or more individual supplies of goods or services is made in conjunction with each other for a single price (where such supply does not constitute a composite supply).

In other words, a supply consisting of items (which are usually supplied separately ) generally having different tax rates can be considered as a mixed supply. The highest tax rate for any individual item in the mixed supply is taken as the tax rate for the entire supply value.

Illustration.— A supply of a package consisting of canned foods, sweets, chocolates, cakes, dry fruits, aerated drinks and fruit juices when supplied for a single price is a mixed supply. Each of these items can be supplied separately and is not dependent on any other. It shall not be a mixed supply if these items are supplied separately.

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