Page 67 - GSTL_20th August 2020_Vol 39_Part 3

2020 ] IN RE : HALLIBURTON OFFSHORE SERVICES INC. (LIH) 281
“2. Definitions. -
(30) “composite supply” means a supply made by a taxable per-
son to a recipient consisting of two or more taxable supplies of
goods or services or both, 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 insur-
ance, the supply of goods, packing materials, transport and insur-
ance is a composite supply and supply of goods is a principal sup-
ply.
(90) “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 sup-
ply is ancillary.
(74) “mixed supply” 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 drinks 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.
8. Tax liability on composite and mixed supplies. - The tax liability on a
composite or a mixed supply shall be determined in the following manner,
namely :-
(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.”
6.14 In terms of the foregoing, a composite supply is to be taxed per the
principal supply, while a mixed supply is to be taxed per that constitutive ele-
ment which attracts the highest rate of tax.
6.15 As regards a supply of ‘works contract’, the same is treated as a
composite supply of service, per Entry 6 of Schedule II, which is reproduced be-
low.
“6. Composite supply
The following composite supplies shall be treated as a supply of services,
namely :-
(a) works contract as defined in clause (119) of section 2”
The term ‘works contract’ is defined at Section 2(119) as under :
“(119) “works contract” means a contract for building, construction, fabri-
cation, completion, erection, installation, fitting out, improvement, modifi-
cation, repair maintenance, renovation, alteration or commissioning of any
immovable property wherein transfer of property in goods (whether as
goods or in some other form) is involved in the execution of such contract.”
6.16 In terms of the notifications prescribing the applicable rates of
GST, there is a singular rate of GST prescribed for a supply in the nature of a
‘works contract’.

GST LAW TIMES  20th August 2020  67