Gujarat AAR Holds Premix Tea Bundled with Various Tea Packs is “Mixed Supply”; GST @ 5% Applies:

Gujarat AAR Holds Premix Tea Bundled with Various Tea Packs is “Mixed Supply”; GST @ 5% Applies M/s Jivraj Tea International Pvt. Ltd., a registered manufacturer of tea and premix tea, approached the Gujarat Authority for Advance Ruling seeking clarity on GST applicability when small quantities of premix tea sachets were supplied as an introductory offer along with various tea products. While each primary tea product was individually sold under HSN 0902 at 5% GST, the premix tea carried 5% GST with effect from 22.09.2025. The applicant stated that the promotional bundling was merely to test market response and that the principal supply in each pack remained the respective tea product. They therefore sought a ruling on whether such bundles constituted “composite supply” or “mixed supply,” the applicable tax rate, and the appropriate HSN to be used. Main Issue: Whether supplying premix tea sachets along with various tea products as an introductory offer constitutes a composite supply or a mixed supply for GST purposes. AAR's Ruling: The Authority reviewed the statutory definitions of composite, mixed, and principal supply to assess whether premix tea sachets bundled with regular tea products were naturally bundled in the ordinary course of business. Referring to statutory illustrations and CBIC guidance, it found that premix tea was neither ancillary nor integral to standard tea packs, and consumers do not ordinarily expect such pairings. Similar businesses also do not supply these combinations as a trade practice. The inclusion of premix sachets was held to be a pure marketing choice, failing the test of composite supply.

The Authority held them to be “mixed supply” under Section 2(74). Applying Section 8(b), it ruled that mixed supply must be taxed at the highest rate in the bundle, though here both items attracted 5%, making the entire pack taxable at 5%. Any of the applicable HSN codes could be used so long as the rates remained uniform. All seven questions were answered on this basis; each promotional pack is a mixed supply taxable at 5%.

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