Section 8 of CGST Act: Tax Liability on Composite and Mixed Supplies
Section 8 of the Central Goods and Services Tax Act, 2017 determines how GST is applied when two or more supplies are provided together. The tax treatment depends on whether the transaction is a composite supply or a mixed supply.
Updated: 15 September 2026
The tax liability on a composite or a mixed supply is determined as follows:
- A composite supply comprising two or more supplies, one of which is the principal supply, is treated as a supply of that principal supply.
- A mixed supply comprising two or more supplies is treated as the supply among them that attracts the highest rate of tax.
Meaning of composite supply
Section 2(30) of the CGST Act defines a composite supply as a supply by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination of them, which are naturally bundled and supplied together in the ordinary course of business, with one supply being the principal supply.
Example of composite supply
Where goods are packed and transported with insurance, the goods, packing, transport and insurance may form a composite supply when they are naturally bundled. The supply of the goods is the principal supply. Under Section 8(a), the complete bundle is therefore treated as the supply of the principal supply.
Meaning of principal supply
Section 2(90) of the CGST Act defines principal supply as the supply of goods or services that constitutes the predominant element of a composite supply and to which the other supplies forming part of that composite supply are ancillary.
The identification of the principal supply is therefore central to the tax treatment of a composite supply. The nature of the bundle, ordinary business practice and the role of each component should be considered rather than merely comparing the individual prices of the components.
Meaning of mixed supply
Section 2(74) of the CGST Act defines a mixed supply as two or more individual supplies of goods or services, or any combination of them, made together by a taxable person for a single price where the combination does not constitute a composite supply.
Example of mixed supply
A package sold for one price containing independent items such as canned foods, sweets, chocolates, cakes, dry fruits, aerated drinks and fruit juices can be a mixed supply when the items are not naturally bundled and each can be supplied separately. Under Section 8(b), the package is treated as the particular constituent supply that attracts the highest applicable rate of tax.
Composite supply vs mixed supply
| Point | Composite supply | Mixed supply |
|---|---|---|
| Statutory definition | Section 2(30) | Section 2(74) |
| Relationship between supplies | Naturally bundled and supplied together in the ordinary course of business | Individual supplies combined for a single price but not constituting a composite supply |
| Principal supply | Present | Not the basis of classification |
| Section 8 treatment | Treated as the principal supply | Treated as the constituent supply attracting the highest tax rate |
How Section 8 works in practice
The first step is to identify all goods and services supplied under the arrangement. If the components are naturally bundled in the ordinary course of business and one is predominant while the others are ancillary, the transaction may be a composite supply. The GST treatment then follows the principal supply.
If independent supplies are offered together for a single price but are not naturally bundled, the arrangement may be a mixed supply. In that situation, Section 8 applies the tax treatment of the constituent supply attracting the highest rate.
Important distinction
A bundle should not be classified as a mixed supply merely because it contains several separately identifiable items. The statutory test for composite supply must first be considered. A mixed supply under Section 2(74) exists only where the combined supply does not constitute a composite supply.
Related CGST Act provisions
Section 8 should be read with Section 7 - Scope of Supply, the definitions in Section 2, and Section 9 - Levy and Collection. Depending on the transaction, the provisions governing time of supply, value of supply, place of supply and the applicable rate notification may also have to be examined.
Frequently asked questions
What rate applies to a composite supply?
A composite supply is treated as the principal supply under Section 8(a). The tax treatment applicable to that principal supply therefore governs the composite supply, subject to the other applicable provisions and notifications.
What rate applies to a mixed supply?
A mixed supply is treated as the constituent supply that attracts the highest rate of tax under Section 8(b).
Is every combination of goods and services a composite supply?
No. The supplies must satisfy the statutory requirements of Section 2(30), including being naturally bundled and supplied together in the ordinary course of business, with one being the principal supply.
Can separately available items form a mixed supply?
Yes, where independent supplies are made together for a single price and the bundle does not qualify as a composite supply, the statutory definition of mixed supply may apply.
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