Goods and Services Tax – GST – By: – Pradeep Jain – Dated:- 21-12-2016 – NEW CONCEPTS OF SUPPLY IN REVISED GST LAW:- The revised GST Law introduces three new concepts of supply which are discussed in this update. COMPOSITE SUPPLY:- Section 2(27) defines this term as composite supply means a supply made by a taxable person to a recipient comprising two or more supplies of goods or services, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply. Illustration given in Revised GST Law: Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and
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e supply in GST regime is similar to the concept of bundled services under Service Tax Laws. MIXED SUPPLY:- Section 2(66) defines this term as mixed supply means two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply. Illustration given in Revised GST Law: A supply of a package consisting of canned foods, sweets, chocolates, cakes, dry fruits, aerated drink 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. This is e
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shall be treated as supply of that particular supply which attracts the highest rate of tax. The above provisions will definitely create disputes and litigation as whether the supply is composite or mixed will be dependent on facts and circumstances of a particular case. Moreover, the revenue department will consider a supply as composite or mixed according to the highest tax criteria. It was hoped that the GST regime would dispense with the classification disputes and lead to lesser litigation but introduction of above concepts will definitely ignite litigation. PRINCIPAL SUPPLY:- Section 2(78) defines this term as principal supply means the supply of goods or services which constitutes the predominant element of a composite supply and to
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