Pencils Sharpener along with Pencils under Brand Name Doms fall under Category of ‘Mixed Supply’: AAR [Read Order]

In the application of Dom Industries, the Gujarat Authority for Advance Ruling (AAR) has ruled that the supply of sharpeners along with pencils is covered under the category of "mixed supply”.

M/s Doms Industries Pvt. Ltd, the applicant is a manufacturer and supplier of all kinds of stationery items like wooden pencils, sharpeners, erasers, mathematical & drawing instruments, ballpoint pens, wax crayons & oil pastels and a wide range of student art materials.

It was submitted by the applicant that for a combination of supplies to qualify as a ‘mixed supply’, it is important that such a combination should be supplied for a single price and that the supplies are not naturally bundled.

Section 2(74) of the CGST Act,2017 defined "mixed supply" which means two or more individual supplies of goods or services, or any combination made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply.

A package consisting of canned foods, sweets, chocolates, cakes, dry fruits, aerated drinks, and fruit juices supplied for a single price is a mixed package. Each of these items can also be supplied separately and is not dependent on the others. It will not be a mixed supply if these items are supplied separately.

Further submitted that where goods are sold in combination with other goods and the same are naturally bundled in the ordinary course of business as per guidance stipulated under the Education guide, such supplies shall be construed as composite supply.

A two-member bench of Amit Kumar Mishra and Milind Kavatkar has observed that a mixed supply containing more than two supplies shall be treated as a supply of that particular supply which attracts a higher rate of tax in the mixed supply.

 We hold that the applicant is required to use the HSN code of the particular supply which attracts a higher rate of tax among all the taxable supplies contained in a pack/box. 21.2

It was viewed that all the supplies of the applicant are covered under the category of Mixed supply hence as per the provision of mixed supply, the supply which attracts a higher rate of tax shall the applicable rate for the supply.

To Read the full text of the Order CLICK HERE

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