CMA Intermediate · Direct and Indirect Taxation · Concept of Supply including Composite and Mixed Supplies
Sharma Gift House sells a single gift pack for ₹1,000 containing chocolates (GST 18%), a cotton scarf (GST 5%) and a dry-fruit box (GST 12%). The items are not naturally bundled and the pack is a mixed supply with no principal supply. What is the GST on the pack as per Section 8?
GST is ₹180. A mixed supply is treated as the supply attracting the highest rate of tax under Section 8(b), which here is 18%. Applying 18% to ₹1,000 gives ₹180; averaging the rates is not permitted.
- A₹180Correct
- B₹120
- C₹50
- D₹116.67
Explanation
A mixed supply is treated as the particular supply attracting the highest rate of tax. The highest rate is 18%, so GST = 1,000 x 18% = ₹180. Using the principal-supply idea or averaging ((18+5+12)/3 = 11.67%, giving ₹116.67) is wrong for a mixed supply.
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