Understanding Mixed and Composite Supply under GST


Date: 28 Jan 2023

What is Mixed and Composite Supply under GST?

Classification of taxable goods and services is the backbone of GST. It is imperative to avoid any hurdles that may be encountered if the segregation of such components is not done correctly. However, some supplies are a merger between different goods and services or, in some cases, an amalgamation of both goods and services. For this reason, GST recognizes mixed and composite supply with a clear taxation distinction. 


What is supply under GST?

The word supply entails all kinds of supply of goods/ services. They are essential during the course of business and namely include the following:

  • Sale

  • Transfer

  • Barter

  • Exchange

  • License

  • Rental

  • Lease

  • Disposal

  • Import of services for evaluation (if even it does not further the business)


Why is mixed and composite supply important?

GST has helped identify prices for each taxable component in different economic strata. It helps ensure the rates and payment of the said taxes are clear. However, in some cases, a particular service may be provided with a specific set of goods, whether related or not, for example, including a complimentary breakfast at an inn, installation services rendered along with a water purifier. It is here that the mixed and composite supply comes into play. They facilitate determining the proper GST rate and ensure uniform tax treatment under GST. 


What is Composite supply under GST?

Composite supply refers to the supply of a combination of goods and services from a taxable entity to a recipient. These are two or more taxable supplies of goods and services, or any combination of the two, that are naturally bundled and provided concurrently. The goods and services cannot be sold separately. 


How to determine whether a supply is a composite supply?

Specific markers separate the normal supply from the composite supply. They are listed below:

  • If there are expectations of a package, the services will be treated as naturally bundled. For example- a new vehicle with all the other intended services, such as vehicle registration and free maintenance services, can only be rendered with a vehicle.

  • Per industry standards, if most service providers in a particular industry treat an entity as a package, then the combination is seen as naturally bundled, such as the meals provided on every flight by the airline. 

The price for the combination supplied will remain the same whether the customer chooses a single provision or the package as a whole. The services or goods enclosed in a package are not available separately. 


What is Mixed Supply?

Mixed supply, under GST, refers to the combination of goods or services provided for a single price. They can be supplied separately and independent of each other. E.g., A hamper consisting of dry fruits, sweets, chocolates, cakes etc. Every one of these goods can be supplied independently of the others. However, if they are supplied independently, it does not classify as a mixed supply.  The nature of a specific product's supply can be ascertained by analyzing whether they are naturally bundled together. If not, it can be classified as a mixed supply because the said bundle of goods or services does not fit the category of composite supply. 


How is mixed supply different from composite supply?

There are two main differences between composite supply and mixed supply. They are namely principal supplies and individually available supplies. 

  • Principal supply: as the name suggests, one supply is the central part of the supply, such as a water purifier necessary for other services to be rendered. In a mixed supply package such as a bag of assortments, it is optional to have a principal supply. 

  • Individual supply: In mixed supply, every single good or service can be rendered individually, independent of each other. For example, even if cashews and almonds are classified as dry fruits, they can be supplied separately without affecting the supply of either of the products. In composite supply, it doesn't sound very sensible to sell one part of the package, such as napkins provided in a restaurant or towels provided in a hotel.



Both composite and mixed supply may sound similar at first glance, but they are two different concepts under GST. The provision of the composite supply is identical to that of naturally bundled services in service. As GST was brought into action to determine a uniform tax across the country, these two provisions ultimately helped the process's smooth running.