Mixed supply of services

[yugesh nama]

Hello sir

what if a person not charge higher amount of tax rate in mixed supply of goods and services? or the person sells the whole package of different goods and services in sach a way that lower rate of gst has higher value of goods and higer rate of gst has lower amount of goods.

[Rajagopalan Ranganathan]

Sir,

According to Section 8 (b) of CGST Act, 2017 " 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."

In view of the legal position you cannot sell the whole package of different goods and services in such a way that lower rate of gst has higher value of goods and higher rate of gst has lower amount of goods.

[KASTURI SETHI]

---------------And that modus operandi would be treated as manipulation with an intent to evade tax.Such method would attract interest and penalty.

[Ganeshan Kalyani]

Pricing need to be changed of the product attracting higher rate of GST . Lets assume you have done this and in the next GST council meeting the lower rate of tax is increased to higher rate then again you will change pricing. This will attract attention of the authority.

Alternately , you can sell the product that attract higher rate under separate invoice. See this possibility.

[YAGAY and SUN]

Paying of an appropriate tax is the essence of GST. GST being an Indirect Taxation would be charged and collected by you from your customer, you have nothing to pay from your pocket. You must be availing ITC on Inputs/Input Services also. If on your output you pay less tax and avail the ITC on higher side then it may trigger the inflated tax structure.

To cope with such situation which may attract unwarranted attention of Revenue Department, it is advisable to pay the tax appropriately as applicable as consequences of evading GST are very serious.

[Ganeshan Kalyani]

Fully agreed with Sri Yagay and Sun. You will get cost of the product with margin and tax component is what you are to collect from the customer and pay to the Govt.

AI Summary

Mixed supply rule requires treating a package as the supply attracting the highest GST rate, preventing value manipulation.
Section 8(b) treats a mixed supply as the supply attracting the highest tax rate, preventing packaging or pricing that shifts value to lower taxed elements to reduce liability; such manipulation can be recharacterised, trigger enforcement scrutiny, and attract interest and penalties. Sellers should charge GST consistent with this rule, consider separate invoicing where appropriate, and avoid contrived pricing changes that may be treated as tax evasion.