TaxTMI 
TaxTMI 
Dear expert,
I would like know what is the rate of tax for contract under painting work. The paint is under 28% and the labour under 18%. Here which one is principal supply.
Thanks in advance.
Composite supply
01 Aug 2017 
11 Replies 
2746 Views Asked by
Composite supply: principal supply determines tax rate for bundled goods and services, affecting invoicing and input credit.
Tax treatment of a painting contract depends on whether it is a works contract for immovable property or a composite supply. If a works contract applies, the works-contract rate governs. If a composite supply applies, the rate of the principal supply governs the entire transaction. Structuring (e.g., contractor purchasing paint) can affect incidence, and mismatches between goods and service rates can cause non refundable input tax credit overflow, so precise classification and invoicing are necessary. (AI Summary)
Tax treatment of a painting contract depends on whether it is a works contract for immovable property or a composite supply. If a works contract applies, the works-contract rate governs. If a composite supply applies, the rate of the principal supply governs the entire transaction. Structuring (e.g., contractor purchasing paint) can affect incidence, and mismatches between goods and service rates can cause non refundable input tax credit overflow, so precise classification and invoicing are necessary. (AI Summary)