Independent Supply

[MAHTAB KHAN]

The invoice of ₹1,332/- pertains to a grocery packet comprising both exempt and taxable items. The items are clearly itemized with respective quantities, weights, rates, and applicable GST. The details are as follows:

• Exempt Items (as per Notification No. 2/2017-Central Tax (Rate)):

o Aata (Flour): 10 kg

o Chawal (Rice): 10 kg

o Daal (Pulses): 2 kg

o Aaloo (Potatoes): 5 kg

o Namak (Salt): 500 gm

• Taxable Items (as per applicable HSN codes and rates):

o Bhuna Chana (Roasted Gram, unbranded): 2 kg, taxable at 5% (HSN 2008)

o Sarso Tel (Mustard Oil): 2 Ltr, taxable at 5% (HSN 1514)

o Dhaniya Powder (Coriander Powder): 100 gm, taxable at 5% (HSN 0909)

o Mirch Powder (Chili Powder): 100 gm, taxable at 5% (HSN 0904)

o Haldi Powder (Turmeric Powder): 100 gm, taxable at 5% (HSN 0910)

GST at 5% is levied only on the taxable items 5% GST on taxable items, resulting in a total GST of ₹18.50. The total invoice value is ₹1,332, comprising ₹1,170 (exempt items), ₹370 (taxable items), and ₹18.50 (GST).

The GST department has treated the entire supply as a ‘mixed supply’ under Section 2(74) of the CGST Act, 2017, alleging that the grocery packet is a combination of goods supplied together for a single price, which do not constitute an 'Independent' or ‘composite supply’. As a result, they have demanded GST on the entire invoice value, including previously exempt items, by applying the highest applicable GST rate (i.e., 5%).

My openion is that If the invoice separately lists each item with its quantity, weight, rate, and applicable GST, the supplies are treated as independent supplies, not composite or mixed. Each item is taxed (or exempted) based on its own GST rate, and the invoice total reflects the sum of individual amounts. There is no single price, and each item is separately identifiable and priced.

 

AI Summary

Independent supply: tax each item based on its own GST rate when separately itemized on invoice.
Where a grocery invoice separately itemises each product with its quantity, rate and applicable tax, those components are to be treated as independent supplies and taxed (or exempted) according to their individual GST classification and rates; separate itemisation prevents treating the bundle as a mixed supply attracting the highest-rate application to the entire invoice.