Chapter III - Levy and collection of tax
Section 8
Section 8: Tax liability on composite and mixed supplies
When a seller supplies multiple goods or services together, section 8 determines which component controls the tax treatment. A composite supply follows its principal supply; a mixed supply follows the component attracting the highest tax rate.
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Need advice on Section 8?
This article is for general information. Refer to the Central Goods and Services Tax Act, 2017 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
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.
Introduction
The key factual task is classifying the bundle. Section 2(30) defines composite supply using the ordinary course of business and a principal supply; section 2(74) defines a mixed supply as two or more individual supplies made together for a single price that do not constitute a composite supply.
Key takeaways
Composite bundle follows its principal supply
First identify the predominant supply under the section 2(90) definition of principal supply; section 8(a) then treats the whole composite bundle as that supply.
Mixed bundle takes the highest-rate component
If the bundle is a mixed supply, section 8(b) treats it as the component attracting the highest rate of tax.
Pricing alone is not classification
A single price is relevant to the mixed-supply definition, but the first question is whether components are naturally bundled in ordinary business.
Composite supply test
List each component, then assess whether they are naturally bundled and ordinarily supplied together. Identify the principal supply using the statutory definition. Apply that principal supply's tax character to the bundle.
Mixed supply test
If two or more individual supplies are combined for a single price but the composite-supply test is not met, test the mixed-supply definition. Compare the applicable rates for each component and use the highest-rate supply under section 8(b).
Keep the classification trail
Retain the customer offer, contract, invoice, separate-sale options and pricing records. These facts support the natural-bundling and principal-supply analysis; labels on an invoice alone do not settle it.
Practical checklist
Do
- List every component before choosing the rate.
- Document why the bundle is naturally supplied together, if claiming composite treatment.
- Verify each component's current notified rate before applying the mixed-supply rule.
Avoid
- Call a promotional hamper composite merely because it has one invoice.
- Assume the most expensive component is automatically the principal supply.
- Apply the highest-rate rule to a genuine composite supply.
Glossary
- Composite supply
- Two or more taxable supplies naturally bundled and supplied together in the ordinary course of business, one being the principal supply.
- Mixed supply
- Two or more individual supplies made together for a single price that do not constitute a composite supply.
- Principal supply
- The predominant element of a composite supply, to which another supply is ancillary.
Frequently asked questions
Does every bundle take the highest GST rate?
No. The highest-rate rule is for a mixed supply; a composite supply follows its principal supply.
Where are composite and mixed supply defined?
See CGST Act sections 2(30) and 2(74), and principal supply in section 2(90).
Need help applying this provision to your situation?
Contact BizeneedLast updated 9 October 2026