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CA Intermediate · Taxation · Supply under GST

Sharma Traders, Delhi, supplies to Gupta Enterprises, Jaipur, a package of a laptop, bag and mouse for a single price of Rs 60,000 (laptop 18% GST, bag and mouse 18% GST) and separately, a hamper of dry fruits (5%), sweets (5%) and a scented candle (18%) priced Rs 2,000 as one gift pack. Which is correct regarding the nature and tax rate of the second supply, assuming the candle is not naturally bundled and the hamper is sold as a single price package?

The gift pack is a mixed supply because dry fruits, sweets and a candle are not naturally bundled in the ordinary course of business and are sold for one price. A mixed supply is taxed at the highest rate among its items, which is 18%.

  1. AIt is a composite supply and taxed at the rate of the principal supply, being the dry fruits at 5%
  2. BIt is a mixed supply and taxed at the highest rate among the items, i.e., 18%Correct
  3. CIt is a mixed supply and taxed at the lowest rate, i.e., 5%
  4. DIt is three separate supplies, each taxed at its own rate

Explanation

Items not naturally bundled in the ordinary course, sold together for a single price, form a mixed supply. A mixed supply is taxed at the rate of the item attracting the highest rate, which here is 18% for the candle. Option A would apply only to a composite supply with an identifiable principal supply.

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