Valuation of goods sold in different units like pair, dozzen, sets, bundles, boxes and units.

[Rajesh Kumar]

Client busy in trading of bed sheets. As per tariff, if item is valued under ₹ 1000 then duty rate will be 5% and if value more than ₹ 1000 then rate of duty is 12%.

Now issue is he is selling goods in dozens, sets, boxes, pairs, units etc which valued more ₹ 1000 per dozens, sets, boxes etc.

Now please suggest at which rate of duty he should cleared the bedsheets.

[KASTURI SETHI]

Is Chapter/Heading of both kinds of sheets the same or different ? Chapter 48 and 63 both. Pl. elaborate in detail.

[Rajesh Kumar]

Sir, Chapter/Heading of both kinds of bedsheets is same ie 63 but selling in different units like dozens, sets. For example he is selling bedsheets 7200/ dozen then one bedsheet costs 600. Then whether he have to charge 5% or 12%. As per tariff, the selling unit should be piece for counting rate of duty.

[KASTURI SETHI]

Yours is not a case of mixed supply. Example quoted by you attract GST @ 5 %. You are selling a single item.

Relevant extract of Board's Flyer No.4 dated 1.1.18

 

Mixed Supply

Under GST, a mixed supply means two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply;

Illustration : A supply of a package consisting of canned foods, sweets, chocolates, cakes, dry fruits, aerated drinks and fruit juices when supplied for a single, price is a mixed supply. Each of these items can be supplied separately and is not dependent on any other. It shall not be a mixed supply if these items are supplied separately.

In order to identify if the particular supply is a Mixed Supply, the first requisite is to rule out that the supply is a composite supply. A supply can be a mixed supply only if it is not a composite supply. As a corollary it can be said that if the transaction consists of supplies not naturally bundled in the ordinary course of business then it would be a Mixed Supply. Once the amenability of the transaction as a composite supply is ruled out, it would be a mixed supply, classified in terms of a supply of goods or services attracting highest rate of tax.

 

[Ganeshan Kalyani]

Selling in dozens, sets etc are method of supply/despatch. It will not alter the price of the product.

[KASTURI SETHI]

Dear Sh.Kalyani Ji,

Your one sentence, rather, two words' has given final touch to my views.

"Selling in dozens, sets etc are method of supply/despatch. It will not alter the price of the product."

Well expressed.

[Ganeshan Kalyani]

Thank you Sir.

[YAGAY and SUN]

You have to depict the UOM as mentioned against the HSN only, as it is statutory required.

[KASTURI SETHI]

M/s.Yagay and Sun,

Sir, Welcome after long gap. I request you to contribute your views on all the queries answered and unanswered. Thanks & regards.

AI Summary

Unit of measure determines GST rate: per-piece valuation governs classification, packaging or dozens don't change the rate for identical items.
Valuation and GST rate for bed sheets sold in dozens, sets or boxes depends on the HSN-prescribed unit of measure; per-piece valuation governs classification where the article is a single item sold in aggregate quantities. Aggregation for dispatch or packaging does not by itself change the applicable rate. Heterogeneous bundles may be mixed supplies attracting the highest rate among components, whereas identical items sold together remain a single supply taxed by the prescribed UOM.