Composite vs Mixed Supply Under Section 8: Which GST Rate Applies?

• →Naturally bundled means the items are ordinarily supplied together in the regular course of business, and one of them is the principal supply.
• →The principal supply is the main item the buyer wants; the rest are incidental to it.
• →A mixed supply has no natural bundle. The items could each be sold on their own, but you chose to bill them together for one price.
• →The single-price test is the giveaway for a mixed supply. Price the items separately on the invoice and they are taxed as separate supplies instead.

• →Composite: goods sold with transit insurance and freight. The goods are the principal supply, so the whole invoice takes the goods’ rate under Section 8(a).
• →Mixed: a gift box of chocolates, dry fruits, and a juice carton sold for one price. Not naturally bundled, so the whole box takes the highest of the three rates under Section 8(b).
• →Why it matters: treating a mixed supply as composite undercharges GST and exposes you to a demand for the shortfall plus interest.
• →Charging the wrong rate also feeds a wrong figure into the buyer’s GSTR-2B, creating a reconciliation mismatch.

The safest practice for genuinely separate items is to list and price them individually, so each line carries its own correct rate instead of forcing a single-price mixed supply at the highest rate. Where the bundle is truly one offering, decide the principal supply and apply its rate.