Let's discuss this one by one Composite Supply Different criteria for any supply to be a Composite Supply as per the definition are: 1. To understand the distinction between composite supply and mixed supply, let us take the example of an airline operator supplying the service of transportation by air along with the service of catering on board for a single price to its customer. A Composite Supply example could be – a 5 star hotel in Mumbai providing a stay package with breakfast. composite supply is ruled out, it would be a mixed supply, classified in terms of a supply of goods or services attracting highest rate of tax. The demand for drink can be met by coffee, tea, coca, oval tine, etc. The supply of goods, packing materials, transport and insurance is a composite supply. The products or services under this supply are those which can not be sold individually. Take another case of the composite supply of beverage. Composite supply means the supply of two or more goods naturally bundled together. They should be high order complimentary goods and their combination should enhance the utility of both/all products.
The demand for meat can be satisfied by beef, fish, mutton, etc. Thus, the supply of goods is the principal supply. 1 : where goods are packed, and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is the principal supply. Insurance, transport cannot be done separately if there are no goods to supply. Composite supply Composite Supply of goods and services is made by a taxable person to a recipient, and: It comprises two or more supplies of goods or services, or A combination of goods and services, which are naturally bundled and supplied, in the ordinary course of business. Composite Supply “Composite supply means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, 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.” These are called natural bundles. A works contract: It is a classic example of composite supply Eatery business provides a bundled supply of preparation of food and serving the same Mixed supply – A riddle bin understanding GST composite supply If the items can be sold separately, i.e., the supplies not naturally bundled in the ordinary course of business, then it would be a mixed supply. Composite supply comprises those products or services that are generally made available in a package only, along with a principal product or service. In this example, the supply of washing supplies is the principal supply, warranty, and maintenance services are incidental. Two or more taxable supplies, 2. The rest of the supply is made up of supporting elements that add value to the principal supply. Every composite supply has a principal supply, which is the main product or service that the buyer primarily wants. This implies that the supply will be taxed wholly as supply of goods. A composite supply is two or more goods or services that are only sold as a set and cannot be sold individually. Distinction between composite supply and mixed supply. Example 2: When a consumer buys a washing machine and he also gets a warranty and the other maintenance contract with the washing machine then such supply shall be called composite supply. Joint supply vs. composite supply We know that joint supply refers to a product and its by-products, for example, from sheep we get meat, leather, wool, milk and cheese – … One typical example of composite supply is when any supplier sells his goods, and sends it to the supplier, then such goods are packed and transported with insurance.