Composite Supply Under GST

GST Composite Supply means a supply comprises of two or more goods or services, which are naturally bundled and are supplied in with each other in the ordinary course of business, one of which is a principal supply.

These items cannot be supplied separately.

Conditions for GST Composite Supply:

Any supply of services will be treated as Composite supply if it satisfies BOTH the criteria;

• Supply of two or more Goods or services together, AND
• It must be a Natural bundle that means Goods or services are usually provided together in the normal course of Business.

This states that the tax liability will be on principal supply.

When the second condition of composite supply is not fulfilled then it is deemed to be a Mixed Supply.

For Example:

Booking of a train ticket that includes a meal. It is a bundle of supplies. It is a composite supply where the products cannot be sold separately. The transportation of passengers is, hence the principal supply. The rate of tax applicable to the principal supply will be charged to the whole composite bundle.

The sale of a laptop with bag – this is a composite supply because the laptop bag is a natural requisite to carry the laptop.