GST Updates

GST Compilation to All Relevant Rule, Notifications and Circular-Section 8 of CGST Act, 2017-Tax liability on composite and mixed supplies

GST Compilation to All Relevant Rule, Notifications and Circular-Section 8 of CGST Act, 2017-Tax liability on composite and mixed supplies

CA Arpit Haldia 


  • Corresponding Rule-Not Applicable


  • Relevant Notification-Not Applicable


  • Relevant Circular-


  1. Classification on Activity of Bus Body Building and Retreading Of Tyres-Circular No. 34/8/2018-GST Dated 1st March 2018


Question-1- Whether activity of bus body building, is a supply of goods or services?

Answer: In the case of bus body building there is supply of goods and services. Thus, classification of this composite supply, as goods or service would depend on which supply is the principal supply which may be determined on the basis of facts and circumstances of each case.


Question-2- Whether retreading of tyres is a supply of goods or services?

Answer- In retreading of tyres, which is a composite supply, the pre-dominant element is the process of retreading which is a supply of service. Rubber used for retreading is an ancillary supply. Which part of a composite supply is the principal supply, must be determined keeping in view the nature of the supply involved. Value may be one of the guiding factors in this determination, but not the sole factor. The primary question that should be asked is what is the essential nature of the composite supply and which element of the supply imparts that essential nature to the composite supply.


  1. Nature of Supply for Servicing of Car-Circular No.47/21/2018-GST [F.NO. CBEC-20/16/03/2017-GST], Dated 8th June 2018


Question-How is servicing of cars involving both supply of goods (spare parts) and services (labour), where the value of goods and services are shown separately, to be treated under GST?

Answer: The taxability of supply would have to be determined on a case to case basis looking at the facts and circumstances of each case. Where a supply involves supply of both goods and services and the value of such goods and services supplied are shown separately, the goods and services would be liable to tax at the rates as applicable to such goods and services separately.


3. Clarification regarding treatment of sales promotion schemes under GST- Circular No. 92/11/2019-GST [F.NO. 20/16/04/2018-GST], Dated 7th March 2019

Buy one get one free offer:

Sometimes, companies announce offers like ‘Buy One, Get One free‟ For example, „buy one soap and get one soap free‟ or „Get one tooth brush free along with the purchase of tooth paste‟. As per sub-clause (a) of sub-section (1) of section 7 of the said Act, the goods or services which are supplied free of cost (without any consideration) shall not be treated as „supply‟ under GST (except in case of activities mentioned in Schedule I of the said Act). It may appear at first glance that in case of offers like „Buy One, Get One Free‟, one item is being „supplied free of cost‟ without any consideration. In fact, it is not an individual supply of free goods but a case of two or more individual supplies where a single price is being charged for the entire supply. It can at best be treated as supplying two goods for the price of one. ii. Taxability of such supply will be dependent upon as to whether the supply is a composite supply or a mixed supply and the rate of tax shall be determined as per the provisions of section 8 of the said Act.  

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