Skip to content

CMA Intermediate · Direct and Indirect Taxation · Concept of Supply including Composite and Mixed Supplies

Sharma Traders sells a gift pack for a single price of Rs 1,000 containing chocolates (taxable at 18%), dry fruits (taxable at 12%) and a ceramic mug (taxable at 28%). The items are not naturally bundled and no one item is the principal supply. The pack is a mixed supply. The tax rate applicable to the whole pack, and the GST on Rs 1,000 taken as the taxable value, is:

A mixed supply is treated as the particular supply that attracts the highest rate of tax. Here the highest rate is 28%, so the whole pack at Rs 1,000 bears GST of Rs 280, regardless of the lower rates on the chocolates and dry fruits.

  1. A12%, Rs 120
  2. B18%, Rs 180
  3. C28%, Rs 280Correct
  4. DAverage of 19.33%, Rs 193

Explanation

Under section 8(b), a mixed supply is treated as the particular supply attracting the highest rate of tax. The highest rate is 28% for the mug, so GST is 1,000 x 28% = Rs 280. The 18% option takes the middle rate, and the average option has no legal basis.

Did you get it right without looking?

One question tells you little. A timed set on Concept of Supply including Composite and Mixed Supplies shows your real accuracy, how long you take and where you lose marks.

Practise Concept of Supply including Composite and Mixed SuppliesFree diagnostic mock

More Concept of Supply including Composite and Mixed Supplies questions