Composite or Mixed Supply

[Kaustubh Karandikar]

• Instruments viz. diagnostic kit are supplied on ‘Free of Cost’ basis to the customer under a Delivery Challan without payment of GST with an assurance of certain amount of business with regard to reagents used in these instruments. The value of such instruments is approx. ₹ 10 Lacs.
• To install the said instruments at the customer site, amount towards ‘Installation and Commissioning’ is recovered from the customer under Tax Invoice. Value of the invoice is ₹ 1.25 Lacs and GST of ₹ 0.23 Lacs is charged on the same.
• Will this be treated as ‘Composite or Mixed Supply’ and if yes, whether GST will be demanded on the free of charge instruments supplied without payment of GST?

AI Summary

Supplying Diagnostic Instruments Free with Paid Installation Isn't Composite or Mixed Supply Under GST Laws. Draft Agreements Carefully. A discussion on a forum addresses whether the supply of diagnostic instruments on a 'Free of Cost' basis, with separate charges for installation, constitutes a composite or mixed supply under GST laws. The consensus among participants is that since separate invoices are issued for the instruments and installation, this does not qualify as a composite or mixed supply. Concerns are raised about the possibility of barter if consideration is not wholly in money, referencing relevant rules and prior rulings. It is suggested that careful drafting of agreements is crucial to avoid unintended tax implications.