Bundled student services treated as mixed supply when not naturally bundled, with GST charged at the highest applicable rate.

Services bundled as boarding, lodging, housekeeping, laundry, medical assistance and food were analysed under GST supply concepts. The educational-institution exemption was unavailable because the provider was not an educational institution and the consideration was charged to individual students, who were treated as the recipients of service. The bundle was not a composite supply because the components were separately priced, varied by package, and were not shown to be naturally bundled or inseparable in the ordinary course of business. The arrangement therefore constituted a mixed supply, with the entire consideration taxable at the highest rate applicable to any constituent service.

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Issues: (i) whether the service provider could claim exemption under the entry applicable to services provided by or to an educational institution; (ii) whether the bundle of boarding, lodging, housekeeping, laundry, medical assistance and food constituted a composite supply; (iii) whether the bundled services amounted to a mixed supply taxable at the highest applicable rate.

Issue (i): whether the service provider could claim exemption under the entry applicable to services provided by or to an educational institution.

Analysis: The exemption entry applied only where the supply was by or to an educational institution. The applicant was neither an educational institution nor the recipient of the consideration was the school. The consideration was charged on the individual students, who were therefore the recipients of the service. The exemption entry was accordingly not attracted.

Conclusion: The exemption under the educational institution entry was not available.

Issue (ii): whether the bundle of boarding, lodging, housekeeping, laundry, medical assistance and food constituted a composite supply.

Analysis: Composite supply requires supplies that are naturally bundled and supplied in conjunction with one another in the ordinary course of business. Here, different packages were charged separately depending on whether lodging was taken, laundry was not provided to day boarders, and distinct considerations were charged for different components. The supplies were not shown to be inseparable or naturally bundled.

Conclusion: The bundled services did not constitute a composite supply.

Issue (iii): whether the bundled services amounted to a mixed supply taxable at the highest applicable rate.

Analysis: The arrangement involved multiple individual supplies combined for a consolidated price, with both taxable and exempt elements. Since the combination was not a composite supply and included supplies attracting different rates, the arrangement fell within the concept of mixed supply. Under the statutory rule, the entire bundle is taxed at the highest rate applicable to any constituent supply.

Conclusion: The bundle was a mixed supply and the whole consideration was taxable at the highest applicable rate.

Final Conclusion: The ruling held that the applicant's services were not exempt as an educational-institution supply, were not a composite supply, and were taxable as mixed supplies at the rate applicable to the highest-rated component.

Ratio Decidendi: Where bundled services are neither naturally bundled nor inseparable in the ordinary course of business, and are supplied for a consolidated price with distinct components and rates, they are not a composite supply but a mixed supply taxable at the highest applicable rate.

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