GST Classification of Combo Offers and Bundled Services

Introduction

Combo offers — where unrelated goods or services are bundled for a single price — are a common marketing strategy. The question arises: How is GST applied to combo offers?

The answer depends on whether the bundle is a composite supply or a mixed supply. This guide explains the legal framework and the classification principles.

Legal Framework: Section 2(74) and Section 8 of the CGST Act, 2017

Mixed Supply Defined

Section 2(74) defines a mixed supply as 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.

Tax Liability on Mixed Supply

Section 8(b) provides that a mixed supply is treated as a supply of that particular supply which attracts the highest rate of tax.

The Key Distinction

Composite Supply: Naturally bundled; principal supply identifiable; taxed at principal supply rate.
Mixed Supply: Not naturally bundled; single price; taxed at the highest rate.

Practical Examples

Composite Supply

Room with Breakfast: Accommodation is the principal supply; breakfast is ancillary.
Hotel with Meal Plans: Naturally bundled; taxed at accommodation rate.

Mixed Supply

Festival Gift Hamper: Dry fruits, chocolates, and perfume — not naturally bundled; taxed at the highest rate.
Supermarket Combo: Unrelated products supplied for a single price — taxed at the highest rate.
Hotel with Multiple Services: Where unrelated services are bundled at a single price, treated as mixed supply and taxed at the highest rate.

The AAR Ruling on Premix Tea Sachets

The Gujarat AAR held that supply of premix tea sachets along with various tea products constitutes a mixed supply, taxable at the highest rate applicable in the bundle.

Best Practices

Determine the Nature of the Bundle: Assess whether the bundle is naturally bundled.
Document the Classification Rationale: Maintain records supporting the classification.
Seek Advance Ruling: For complex bundles, apply for an advance ruling.
Review Periodically: Review classification when product bundles change.

Conclusion

Combo offers and bundled services are classified as mixed supplies if the components are not naturally bundled and are supplied for a single price. Mixed supplies are taxed at the highest rate applicable to any component. The naturally bundled test determines classification.

Offering combo deals? Anuj Desai & Associates provides expert guidance on mixed supply classification. Contact us today.

Contact us:

Email: office@anujdesaiassociates.com
Phone: 9619456656
Website: https://anujdesaiassociates.com
LinkedIn: linkedin.com/in/ca-anuj-desai-122547230

Compliance GuideGST combo offersbundled services GSTGST mixed supplyclassification combo offersSection 8 mixed supplyGST compliance IndiaGST classification 2026GST classification guideGST classification consultantGST classification lawyerGST classification CAGST classification expertGST classification advisoryGST classification procedureGST classification lawCGST Act classificationGST classification rulesGST classification regulationsGST classification instructionsGST classification circularGST classification notificationGST classification updateGST classification newsGST classification case lawGST classification litigationGST classification remedyGST classification solutionGST combo processGST combo documentsGST combo complianceGST combo certificateGST combo GSTINGST combo portalGST combo step by stepGST combo advisoryGST combo expertGST mixed supply Section 2(74)GST mixed supply highest rateGST mixed supply examplesGST mixed supply AARGST mixed supply classificationGST mixed supply hotelGST mixed supply gift hamperGST mixed supply combo offers