What are Mixed and Composite Supplies under GST?


Supply under GST includes the transfer of goods or services, whether for payment or not, in the course of business. This covers a wide range of supply methods such as sale, transfer, exchange, barter, lease, rental, or disposal. The definition of supply under GST also includes importing goods and services. Every taxable supply of goods or services attracts tax under GST, and it is crucial to correctly ascertain the nature and value of the supply to comply with the provisions of GST. In short, supply is a broad term that covers all kinds of goods/services essential during the business. The supply of goods and services is divided into two categories – mixed and composite supplies. 

Mixed supplies under GST refer to a combination of two or more individual goods or services that are sold together in a single package. Composite supplies, on the other hand, are a combination of goods or services that are naturally bundled and sold together in the ordinary course of business. Treating mixed and composite supplies under GST is different and can impact tax liability.

Why are Mixed and Composite Supplies Important?

GST has been instrumental in determining clear prices for taxable components across various economic strata. However, there are instances where a service is provided along with a set of goods, whether related or not, such as complimentary breakfast at hotels or installation services with a water purifier. This is where the concepts of mixed and composite supplies become relevant. They aid in determining the appropriate GST rate and ensuring uniform GST treatment.

What is Composite Supply under GST?

A composite supply under GST refers to the supply of a package of goods and services from a taxable entity to a recipient. It is a combination of two or more taxable supplies of goods and services, or any combination of the two, that are naturally bundled and provided together and cannot be sold separately.

How to determine whether a supply is a composite supply?

There are certain indicators that distinguish a composite supply from a regular supply. They are as follows:

If the goods or services are intended to be provided together, they are considered naturally bundled. For example, a new car with additional services like vehicle registration and free maintenance can only be sold as a package deal.

If it is the industry norm for most service providers to offer a combination of goods and services as a package, then it is considered naturally bundled. This could include the meals provided on every flight by an airline.

The price for the bundled goods and services remains the same whether the customer chooses to purchase them individually or as part of the package. Additionally, the goods and services included in a package cannot be sold separately.

What is Mixed Supply?

Under GST, a mixed supply refers to a combination of goods or services offered for a single price, which can also be supplied separately and independently. For instance, a gift basket containing dry fruits, sweets, chocolates, cakes, etc., where each of these items can be sold independently. However, if these goods are sold separately, it is not a mixed supply. To determine the nature of a mixed supply, it is necessary to determine whether the items are naturally bundled together. If not, then it is classified as a mixed supply since the bundle of goods or services does not meet the requirements for a composite supply.

How is Mixed Supply Different from Composite Supply?

Composite supply and mixed supply differ mainly in terms of principal supplies and individually available supplies.

The principal supply is the primary component of the supply, such as a water purifier that is essential for other services to be provided. Having a principal supply is optional in a mixed supply package like a gift basket.

On the other hand, in mixed supply, each item or service can be supplied separately without affecting the supply of any other item or service. For instance, cashews and almonds are classified as dry fruits but can be supplied individually. However, selling one package component in a composite supply, like napkins in a restaurant or towels in a hotel, may not be practical.


Composite supply and mixed supply may seem similar at first glance, but they are two distinct concepts under GST. Composite supply is akin to naturally bundled services, while mixed supply refers to the supply of goods or services combined for a single price, which can also be supplied separately. These provisions have been put in place to ensure a uniform tax system across the country and facilitate the smooth functioning of the process under GST.

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