A person or a business which supplies either goods or services or both are liable to pay GST. In simple words, supply under GST includes the supply of all kinds of good and services such as barter, rental, transfer, sale, license, exchange, disposal made and lease. Here, the person gives consideration to further the business. There can be different types of supply out of which two supplies are composite and mixed supply.

Composite Supply

Composite Supply under GST is a supply which naturally bundles and comprises two or more goods or services or both and supplies in conjunction with each other in the ordinary course of business, one of which is a principal supply. Where the essential character of any good and/ or service does not change while it is being provided, it is Composite Supply.

The tax rate on composite supply is applicable to the principal supply.


  • Where goods are packed and transported with insurance – the supply of goods, packing materials, transport and insurance is a composite supply out of which the Supply of Goods is a principal supply.
  • A hotel provides a package of 4 days and 3 nights with the facility of breakfast. This is a natural bundling of services. The service will be treated as service of providing Hotel Accommodation.
  • A hotel is booked for the conference of 100 delegates with facilities like breakfast, tea and coffee during the conference, access to fitness room, availability of conference room. A bouquet of services is being provided, many of them chargeable to different effective rates of tax. None of the individual constituents is able to provide the essential character of service. However, if the service is described as convention service, it is able to capture the entire essence of the package. Thus, the service may be judged as Convention Service and chargeable to full rate.
  • The bundle of catering on board and transport by air is a bundle offered by a majority of airlines. Such service is an ancillary service and is naturally bundled in the ordinary course of business.
  • You bought a cake from the nearby bakery shop (supplier). With that cake, you got candles and a knife too. This service is clearly said to be naturally bundled as you are not paying extra for the knife and candles but you have only paid for cake (principal supply). Supply of cake along with knife and candles shall be taxed at the rate being imposed on the supply of cake under GST.

composite supply

Mixed Supply

Mixed supplies under GST is when a supply of goods and/ or services is made together at a single price. The items can be supplied separately and are independent of each other. If the items are supplied separately instead of together then we cannot call it mixed supply.

The highest rate out of all the goods and/or services in the mixed supply will be applicable.


  • A supply of a package consisting of canned foods, sweets, chocolates, cakes, dry fruits, aerated drinks and fruit juices when supplied for a single, price is a mixed supply. Each of these items is capable of being supplied separately and is independent of each other.
  • A house is given on rent one floor of which is to be used for residence and the other for housing a printing press. Such renting for two different purposes is not naturally bundled in the ordinary course of business. Therefore, if a single rent deed is executed it will be treated as a service comprising entirely of such service which attracts the highest liability.
  • A shopkeeper is selling collectively a bundle of chocolates and biscuits. This kind of supply is called as mixed supply as it can be sold separately too. Here, the applied GST rate will be maximum. If chocolate has the higher rate, this rate will apply on the whole mixed bundle.

multiple supply


For composite and mixed supply we can say that if supplies are not naturally bundled in the ordinary course of business then it would be a mixed supply but if it is naturally bundled then it would be composite supply.

Determination of tax liability of composite and mixed supply

The tax liability on composite and mixed supply shall be determined in the following manner:

(a) A composite supply comprising two or more supplies, one of which is a principal supply shall be treated as a supply of such principal supply
(b) A mixed supply comprising two or more supplies shall be treated as a supply of that particular supply which attracts the highest rate of tax

In case you are confused about GST as a business owner, feel free to consult the GST experts at Legal Raasta. You can get comprehensive assistance with GST Registration and GST Return Filing. You can also use our GST software for doing end-to-end GST compliance.