# Composite Supply vs Mixed Supply (Section 8)

When two or more supplies are bundled together, classification depends on whether they are naturally bundled or artificially combined.

## Composite Supply

Two or more supplies that are naturally bundled and supplied together in the ordinary course of business.
One of them is a principal supply.
Tax treatment: Rate of the principal supply applies to the entire bundle.

## Mixed Supply

Two or more individual supplies made together for a single price, where the supplies are NOT naturally bundled.
Tax treatment: Rate of the supply attracting the highest rate of tax applies to the entire bundle.

## Comparison

Aspect	Composite Supply	Mixed Supply
Bundling	Natural	Artificial / Combined
Identifiable principal?	Yes	No
Tax rate applied	Rate of principal supply	Highest rate among the items
Single price?	May or may not be	Single price

Worked example

### Example 1

Composite Example: Air travel with in-flight meal — flight is principal, meal is naturally bundled. → Entire price taxed at the rate applicable to passenger transport.

### Example 2

Mixed Example: A Diwali gift hamper containing chocolates, dry fruits, candles, and wine sold for ₹2,000. Not naturally bundled. → Entire ₹2,000 taxed at the highest GST rate among the items (likely wine/luxury rate).

### Example 3

Composite Example: Sale of laptop with charger and cable. Charger/cable naturally bundled with laptop. → Rate of laptop applies to entire price.

⚠️ Common exam mistakes

Treating every bundled supply as composite — must check 'natural bundling in ordinary course of business' test.
Splitting a composite supply and applying different rates — must apply one rate (of principal supply) on whole.
Applying principal supply rate to a mixed supply — must apply the HIGHEST rate.

Bare-Act text Section 8 · CGST Act, 2017 · click to expand

Section 8: The tax liability on a composite or a mixed supply shall be determined in the following manner — (a) a composite supply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply; and (b) a mixed supply comprising two or more supplies shall be treated as a supply of that particular supply which attracts the highest rate of tax.

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