Place of supply in case of Mixed supply.

[Shyam Agarwal]

Sir, In case of Mixed supply of Goods and Services then tax rate shall be apply the highest rate among both of them. But how Place of supply shall be determined in such case. If there is combination of goods and service both in Mixed supply then Place of supply will be determined either as per Place of supply for Goods u/s 10 of IGST act or Place of supply for services u/s 12 of IGST Act? Please suggest.

[KASTURI SETHI]

Dear Querist,

This Board's circular will help you to arrive at appropriate decision:-

Meaning and scope of supply

 

 

[Shyam Agarwal]

Sir, Thanks for your reply but GST law is silent with respect to determination of place of supply in case of Mixed supply. Rate of Tax shall be highest one as enumerated in the law but What shall be place of supply in such a situation? Whether Place of supply will be determined on the basis of Principle supply involved in the transaction or Place of supply will be determined as per goods or service of which Rate has been applied (i.e. Highest among both of them).

[PAWAN KUMAR]

Dear Mr.Shyam,

Please elaborate the mixed supply in details.

[Shyam Agarwal]

Dear Sir, Mixed supply means combination of two or more goods or service or both suppied together but there is no element of Composite supply and not naturally bundled in common trade parlance for example supply of Washing powder with Bucket where single price for both the goods is charged then it will be treated as a Mixed supply and GST on entire price shall be charged at higher rate among the washing powder or Bucket.

[CASusheel Gupta]

As per 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

For the purpose of ascertaining tax rate, supply is deemed to be of supply which attracts highest rate of tax.

For POS, we need to identify our supply either as goods or services and should not be confused with taxability under section 8.

Request u to post the nature of supply for which this question is being asked. So that more analysis could be done by all the experts.

[Shyam Agarwal]

Sir, Thanks for reply and please consider a situation where Builder sells a Flats in under construction building and give a Car to flat buyers. Further he charges a single price (i.e. Without any bifurcation for price for flat and car). Thus, as per GST law it is not a composite supply as it is not naturally bundled and accordingly it being a Mixed supply. Now the rate of GST being 28% (being a Rate of GST for Car) shall be charged on entire price. But the question is that on which basis Place of supply shall be determined in such case either on the basis of Works contract (being a Service) or on the basis of Car (being a Goods). Please suggest sir.

AI Summary

Place of supply determination in mixed supplies requires characterising the supply as goods or services before applying POS rules.
Section 8(b) deems a mixed supply to be the component attracting the highest rate only for determining the tax rate; it does not govern identification of the place of supply. For mixed supplies comprising goods and services, the rate follows the highest-rated component, but place of supply must be determined by first characterizing the supply as goods or services and then applying the respective place-of-supply provision applicable to that characterization.