Question: In case of composite supply, though as per section 8 rate applicable in case of composite supply is that of principal supply but neither as per section 2(30) defining composite supply nor time of supply or place of supply provisions have any reference to it?
Answer: section 8 of the CGST Act, 2017 very clearly provides that in case of Composite Supply the tax liability shall be determined in the following manner
(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.
The reason for this is that two or more supplies which form part of composite supply cannot have two different time of supply or place of supply provisions applicable to them. Please note that the nature of entire composite supply is determined by the Principal supply. In other words, the other supplies contained in the composite supply lose their character and take colour of the Principal Supply. The time and place of supply as applicable on the Principal Supply shall determine the time and place of supply of the entire Composite Supply.
