Composite supply in exam support services taxed by the principal supply, attracting the GST rate for education support services.
Multiple services bundled for examination support and student facilitation were treated as naturally bundled in conjunction with one principal purpose, so the supply was a composite supply rather than a mixed supply. The ruling applied the statutory rule that tax follows the principal supply, which here was the conduct of examinations classified as education support service. On that basis, the bundled exam support services were held taxable at the rate attached to the principal supply, namely 18% GST, split as 9% CGST and 9% HGST.
Issues: (i) Whether the activities involved in the exam support services constitute a mixed supply or a composite supply; (ii) What is the rate of GST applicable on the exam support services.
Issue (i): Whether the activities involved in the exam support services constitute a mixed supply or a composite supply.
Analysis: The relevant statutory framework distinguishes a composite supply from a mixed supply by reference to whether the supplies are naturally bundled and supplied in conjunction with each other, with one identifiable principal supply. On the facts, the services listed in the agreement for examination support and student facilitation were found to be bundled together for the conduct of IELTS examinations and to lack independent existence in the manner presented.
Conclusion: The activities involved in the exam support services constitute a composite supply, not a mixed supply.
Issue (ii): What is the rate of GST applicable on the exam support services.
Analysis: Once the supply was characterised as composite, the tax consequence followed the principal supply. The principal supply was the conduct of examinations, which was treated as education support service under the relevant service classification. The applicable rate was taken from the notification prescribing tax on that service entry.
Conclusion: The exam support services are taxable at 18%, comprising 9% CGST and 9% HGST, under the relevant notification entry for education support services.
Final Conclusion: The ruling accepts the applicant's treatment of the bundled examination support services as a composite supply and applies the GST rate attached to the principal supply of examination-related education support services.
Ratio Decidendi: Where multiple services are naturally bundled and supplied in conjunction with each other for a single principal purpose, the supply is a composite supply and is taxed according to the principal supply.
TaxTMI 
AI Drafter ✕
TaxTMI 
TaxTMI 
