Composite Supply

[Kaustubh Karandikar]

XYZ is developing a software which is embedded in the product manufactured and then the product is exported by XYZ. XYZ to issue

1) separate tax invoice for goods and service invoice for software or

2) being a composite supply, a single invoice for goods and services to be issued and the GST rate applicable for goods being principal supply will be applicable?

AI Summary

Composite supply: single invoice based on principal supply of goods may govern GST treatment and export zero-rating.
If the arrangement qualifies as a composite supply with goods as the principal supply, the supplier should issue the tax invoice for the goods with GST treatment as applicable; for exports the supplier may zero-rate the supply under a letter of undertaking. Determination depends on whether the goods and embedded software are separately marketable or are naturally bundled in ordinary business, with a single non-separately-marketable product indicating a single supply.