New Definition of Supply in Revised GST Law
Model GST Law dated November 25, 2016 introduces three new concepts of supply. Below are definition of New concept of supply:
COMPOSITE SUPPLY: Section 2(27) defines the term composite supply as “means a supply made by a taxable person to a recipient comprising two or more supplies of goods or services, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply;
Illustration : Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is the principal supply.
MIXED SUPPLY: Section 2(66) defines the term Mixed Supply as, “means two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply;
Illustration: A supply of a package consisting of canned foods, sweets, chocolates, cakes, dry fruits, aerated drink and fruit juices when supplied for a single price is a mixed supply. Each of these items can be supplied separately and is not dependent on any other. It shall not be a mixed supply if these items are supplied separately.
PRINCIPAL SUPPLY: Section 2(78) defines the term Principal Supply “means the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary and does not constitute, for the recipient an aim in itself, but a means for better enjoyment of the principal supply;
Illustration: There is no example given in the Revised GST Law for principal supply.