Section 8 – Composite & mixed supply
Section 8 of CGST Act, 2017 – Tax Liability on Composite and Mixed Supplies
Updated on: February 2026 (as amended till date)
Prepared by: Yours Tax Consultant
1. Bare Act Text – Section 8 (Effective till date)
Section 8(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.
Section 8(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.
2. Legislative Background & Amendments
Section 8 has remained substantively unchanged since inception. However, its interpretation has evolved significantly through:
- GST Council clarifications
- Departmental circulars
- Advance rulings and High Court judgments
Therefore, while the text remains the same, practical application has been refined over time.
3. What is Composite Supply? (Read with Section 2)
As per Section 2(30), composite supply means:
- Two or more taxable supplies
- Naturally bundled
- Supplied in conjunction with each other
- In the ordinary course of business
Tax Treatment:
Composite supply is taxed at the rate applicable to the
principal supply.
4. What is Mixed Supply? (Read with Section 2)
As per Section 2(74), mixed supply means:
- Two or more individual supplies
- Not naturally bundled
- Offered together for a single price
Tax Treatment:
Mixed supply is taxed at the rate applicable to the
supply attracting the highest rate of tax.
5. Key Difference between Composite and Mixed Supply
| Particular | Composite Supply | Mixed Supply |
|---|---|---|
| Bundling | Naturally bundled | Artificially bundled |
| Tax Rate | Rate of principal supply | Highest rate among supplies |
| Business Practice | Normal course of business | Not normal business practice |
6. Practical Examples (Updated Understanding)
Composite Supply – Example
Supply of goods along with transportation and insurance (where transportation is incidental) is a composite supply.
GST rate applicable will be the rate of the goods supplied.
Mixed Supply – Example
A festival hamper containing sweets, chocolates and dry fruits sold for a single price is a mixed supply.
GST will be charged at the highest rate applicable to any item in the hamper.
7. Section 8 Read with Relevant CGST Rules (Valuation Rules)
Once a supply is classified as composite or mixed under Section 8, valuation is determined using the following CGST Rules:
- Rule 27 – Value of supply where consideration is not wholly in money
- Rule 28 – Value of supply between related / distinct persons
- Rule 30 – Value based on cost
- Rule 31 – Residual valuation method
These rules apply after determining the nature of supply under Section 8.
8. Important Litigation Aspects
Disputes under Section 8 commonly arise due to:
- Wrong classification between composite and mixed supply
- Artificial splitting of naturally bundled services
- Incorrect adoption of lower tax rate
Courts and authorities examine:
- Business practice
- Customer perception
- Nature of bundling
9. Related Provisions
10. Professional Tip
Always examine the nature of bundling in real business practice. Artificial classification as composite supply to reduce tax rate is one of the most common reasons for GST disputes.
Disclaimer: This article is for educational and professional reference only. The law stated is as applicable and interpreted till date and may be subject to future amendments, notifications or judicial pronouncements.
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