18% GST Rate applicable Geometry Compass Boxes, is a Mixed Supply, rules AAR [Read Order]

The Maharashtra Authority for Advance Ruling ( AAR ) held that geometry compass boxes supplied to municipal schools qualify as a 'mixed supply,' attracting the highest applicable GST rate of 18%.

M/s Amardeep Udyog, a Mumbai-based firm that supplied geometry compass boxes containing multiple items including a compass, divider, scale, protractor, set squares, pencil, eraser, and sharpener to the Brihanmumbai Municipal Corporation (BMC) for school students.

While BMC argued for a 12% GST rate under HSN 7310 (for metal boxes), the supplier classified the product under HSN 9017 (mathematical instruments) at 18%.

The AAR examined whether the supply constituted a 'composite supply' (where items are naturally bundled) or a 'mixed supply' (where unrelated items are sold together). Referring to CBIC guidelines (2012), the authority noted that a true composite supply requires items to be inseparable in ordinary business practice. However, the geometry box in question contained standalone items like pencils and sharpeners, which are commonly sold separately.

The ruling cited Section 8(b) of the CGST Act, which mandates that mixed supplies be taxed at the highest rate among the individual components. Since the box included a measuring scale (classified under HSN 90178010 at 18%), the entire supply was taxed at that rate. Other items like the metal box (12%), pencil (12%), and eraser (5%) had lower rates but did not alter the final determination.

The bench consisted of D.P. Gojamgunde and Priya Jadhav noted that the bundling was not commercially intrinsic, as customers could purchase each item separately.

Accordingly, the Maharashtra AAR determined that Geometry Compass Boxes qualify as a mixed supply under GST, classifying them under HSN 90178010 and applying the highest applicable tax rate of 18% (9% CGST + 9% SGST).

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates