AAR Rules HP Indigo Ink and Consumables Bundle a ‘Composite Supply’ Following High Court Remand

The applicant, M/s. HP India Sales Private Limited, supplies high-end HP Indigo digital printing presses and their associated consumables, including specialized liquid “ElectroInk,” binary ink developers, blankets, and photo imaging plates. Under their primary “Click Model,” which accounts for over 99% of their revenue, these items are supplied as an interdependent “Imaging Kit”. Customers are billed on a “per click” basis rather than for individual components.

The Advance Ruling Authority (AAR) and the Appellate Authority (AAAR) had classified this as a “mixed supply”. However, the Hon’ble High Court set aside these orders in 2025 and remanded the matter back to the AAR for a fresh decision based on expert evidence and the unique technological interdependencies of the products.

Issue Before HC: Whether the supply of ElectroInk along with other consumables under the HP Indigo “Click Model” constitutes a “composite supply” or a “mixed supply” under the GST Act.

HC Rules: The AAR re-evaluated the case, focusing on the technological necessity and commercial reality of the “Click Model.” The applicant demonstrated through expert certificates that the components of the Imaging Kit are interdependent and must function in unison to achieve the desired print output.

The Authority observed that under the “per click” arrangement, the customer intends to procure a “printing solution” rather than individual goods. Thus, the AAR ruled that the supply is a “composite supply” as defined under Section 2(30) of the CGST Act. The entire bundle is taxable at the GST rate applicable to the “principal supply,” which in this case is the ElectroInk essential to the proprietary printing process.

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