Composite supply

[SK Krishna]

Dear experts,

Tax payer has two seperate concerns, one supplying CSD Beverages at 28% rate of tax & 12% cess ( Total 40% of tax) and other concern providing transport facility to the first concern(only) at 12% rate of tax. Now Assessing officer questions the seperation of two businesses and alleges that the intention of the tax payer is to evade payment of tax at rate of 40% as composite supply. Kindly provide the following clarifications:

1. Whether the seperation of two businesses of the tax payer is not allowed under the Gst Act?

2.whether the supply has to be treated as two seperate ones or is it a composite supply and liable to be taxed at 40%?

3. Whether any case laws or Rulings were available to defend the case ?

Thanks in advance for all experts for your immense support.

AI Summary

Composite supply requires a single supplier bundling items; separate entities' supplies remain distinct and taxable accordingly.
When two distinct legal entities independently supply goods and services, the supplies are ordinarily treated as separate transactions rather than a composite supply; composite characterisation requires a single supplier bundling items. The revenue seeking to aggregate such supplies must bear the burden of proof, and resolution depends on a factual and contractual assessment of the parties' roles, delivery terms, and the economic reality of the arrangement.