Independent Supply, Goods and Services Tax - GST

[MAHTAB KHAN]

The invoice of ₹1,332/- pertains to a grocery packet comprising both exempt and taxable items. The items are clearly itemized with respective quantities, weights, rates, and applicable GST. The details are as follows:

• Exempt Items (as per Notification No. 2/2017-Central Tax (Rate)):

o Aata (Flour): 10 kg

o Chawal (Rice): 10 kg

o Daal (Pulses): 2 kg

o Aaloo (Potatoes): 5 kg

o Namak (Salt): 500 gm

• Taxable Items (as per applicable HSN codes and rates):

o Bhuna Chana (Roasted Gram, unbranded): 2 kg, taxable at 5% (HSN 2008)

o Sarso Tel (Mustard Oil): 2 Ltr, taxable at 5% (HSN 1514)

o Dhaniya Powder (Coriander Powder): 100 gm, taxable at 5% (HSN 0909)

o Mirch Powder (Chili Powder): 100 gm, taxable at 5% (HSN 0904)

o Haldi Powder (Turmeric Powder): 100 gm, taxable at 5% (HSN 0910)

GST at 5% is levied only on the taxable items 5% GST on taxable items, resulting in a total GST of ₹18.50. The total invoice value is ₹1,332, comprising ₹1,170 (exempt items), ₹370 (taxable items), and ₹18.50 (GST).

The GST department has treated the entire supply as a ‘mixed supply’ under Section 2(74) of the CGST Act, 2017, alleging that the grocery packet is a combination of goods supplied together for a single price, which do not constitute an 'Independent' or ‘composite supply’. As a result, they have demanded GST on the entire invoice value, including previously exempt items, by applying the highest applicable GST rate (i.e., 5%).

My openion is that If the invoice separately lists each item with its quantity, weight, rate, and applicable GST, the supplies are treated as independent supplies, not composite or mixed. Each item is taxed (or exempted) based on its own GST rate, and the invoice total reflects the sum of individual amounts. There is no single price, and each item is separately identifiable and priced.

 

Posts / Replies

[YAGAY andSUN]

Your interpretation is legally correct and well-founded based on the provisions of the CGST Act, 2017, and relevant judicial principles. The treatment of the transaction by the GST Department as a "mixed supply" is incorrect, provided the facts stated in your case are accurate and supported by documentary evidence (e.g., invoice format, packaging, pricing, etc.).

Legal Basis for Your View:

1. Definition of Mixed Supply – Section 2(74) of CGST Act

"Mixed supply" means two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other for a single price, where such supply does not constitute a composite supply.

• The key phrase here is "for a single price". In your case, each item is individually priced, and the invoice clearly mentions:
  • Quantity
  • Weight
  • Unit rate
  • Applicable GST
• Therefore, the supply is not for a single price, and thus, does not qualify as a mixed supply under Section 2(74).

2. Exempt and Taxable Items in a Single Invoice

As per standard GST practice and CBIC's guidance, it is permissible to issue a single invoice covering both exempt and taxable goods, provided:

• The goods are individually itemized,
• Their classification and taxability are properly disclosed,
• The invoice clearly shows the applicable rate and value per item.

Thus, if this is satisfied (as per your description), each item retains its individual character and is taxed accordingly.

3. No Composite Supply Either

The situation also does not fall under composite supply (Section 2(30)), since:

• There is no principal supply to which others are ancillary.
• The items are not naturally bundled in the ordinary course of business (e.g., pen and refill, or printer and toner).
• These are daily-use grocery items, separately consumable and not linked functionally.

4. Relevant Case Laws / Circulars

While there is limited direct jurisprudence specifically on grocery kits, the following references support your stand:

• CBIC Circular No. 80/54/2018-GST dated 31st December 2018 – Clarified tax treatment in case of bundled supplies and emphasized on independent supply pricing for identifying mixed supplies.
• In Abbott Healthcare Pvt. Ltd. vs. CST, Kerala (2020 (1) TMI 338 - KERALA HIGH COURT), the Court ruled that individual supply components must be considered independently unless it can be clearly shown that they form a single indivisible supply.
• AAR Rulings – In various cases where items in a combo pack were priced separately and sold as individual goods (not for a single price), authorities ruled in favor of independent tax treatment.

Conclusion:

Your View is Correct:

• The grocery items are not supplied for a single price.
• The invoice separately identifies each item with rate, value, and GST classification.
• Therefore, Section 2(74) on mixed supply does not apply.
• Tax should be levied only on taxable items as per their respective rates; exempt items remain exempt.

Recommendation:

• Respond to the GST Department’s notice with a detailed explanation, citing Section 2(74), the invoice copy, and relevant circulars.
• Attach a copy of the itemized invoice to demonstrate that there is no single price for the combined items.
• If needed, file a representation or appeal under the appropriate forum (Adjudication or Appellate Authority).

***

[YAGAY andSUN]

Here is a formal reply/representation (draft) that can be submitted to the GST Department in response to the notice treating the grocery invoice as a "mixed supply":

[On Letterhead of the Registered Person / Business Entity]

To

The Assistant Commissioner / Superintendent

Office of the [Jurisdictional GST Officer]

[Address]

Subject: Submission of Representation Against Treatment of Supply as "Mixed Supply" under Section 2(74) of the CGST Act, 2017 – Reg.

Reference: Notice No. [Insert Reference Number], dated [Insert Date]

GSTIN: [Insert GSTIN]

Invoice No. & Date: [Invoice No., Date]

Respected Sir/Madam,

We are in receipt of the above-referenced communication wherein the supply made vide Invoice No. [] dated [], involving a grocery packet comprising both exempt and taxable items, has been treated as a ‘mixed supply’ under Section 2(74) of the Central Goods and Services Tax Act, 2017. In the said notice, the entire invoice value has been subjected to GST at the highest applicable rate, i.e., 5%.

We respectfully submit that this treatment is factually and legally incorrect, and we wish to submit the following representation in support of our stand:

1. Supply is Not for a Single Price – Hence Not a Mixed Supply

As per Section 2(74) of the CGST Act, a mixed supply is defined as:

“two or more individual supplies made together for a single price, which do not constitute a composite supply.”

In our case, each item in the grocery packet is:

• Separately itemized in the invoice,
• Clearly mentioned with its quantity, weight, unit price, and
• Subject to its individual GST rate (or exemption).

There is no single or lump-sum price charged for the entire packet. The total invoice value is a summation of individual items’ prices, with GST applied only on the taxable components. Accordingly, the supply does not qualify as a mixed supply, and this classification is not legally sustainable.

2. Exempt Items Must Retain Their Exempt Nature

The following items included in the supply are exempt under Notification No. 2/2017-Central Tax (Rate) dated 28.06.2017:

• Aata (Flour) – 10 kg
• Chawal (Rice) – 10 kg
• Daal (Pulses) – 2 kg
• Aaloo (Potatoes) – 5 kg
• Namak (Salt) – 500 gm

These items are naturally exempt and were supplied independently, not as a bundle dependent on taxable items. Their classification and exemption status cannot be altered merely due to their inclusion in a multi-item invoice, especially when pricing and taxability are transparently and separately disclosed.

3. No Composite Supply Either

The grocery items are not naturally bundled nor linked in a manner to qualify as a composite supply under Section 2(30) of the CGST Act. Each item is:

• Sold and consumed independently,
• Not ancillary to any principal supply, and
• Not dependent on the supply of any other item.

Hence, neither the concept of composite supply nor mixed supply applies in this transaction.

4. Legal Support and Precedents

We also draw your attention to:

• CBIC Circular No. 80/54/2018-GST dated 31.12.2018, which clarifies the principles of determining bundled supplies and the relevance of pricing structure.
• Various judicial and advance ruling precedents which support that if goods are separately identifiable, priced, and taxed, they do not constitute a mixed supply.

5. Request for Withdrawal of Incorrect Tax Demand

In light of the above, we respectfully request your good office to:

• Reconsider the classification of the supply in question,
• Withdraw the proposal to tax the entire invoice value at the highest rate, and
• Allow appropriate GST only on the taxable items, as per the tax invoice.

We are enclosing a copy of the invoice, item-wise price and tax chart, and relevant notifications for your kind reference.

We request an opportunity to be heard in person, if required, to explain our submission further.

Thanking you,

Yours faithfully,

For [Name of the Business Entity]

[Authorized Signatory]

Name: ___________________

Designation: ______________

Mobile: ___________________

Email: ____________________

Place: ____________

Date: _______________

Enclosures:

1. Copy of Invoice No. [__________]
2. Item-wise price and GST chart
3. Copy of Notification No. 2/2017-Central Tax (Rate)
4. Copy of CBIC Circular No. 80/54/2018-GST

***

[MAHTAB KHAN]

Actually The respondent supplied COVID-19 Relief Kits to the District Administration during the pandemic as part of the official relief program. Each kit was supplied for a consolidated amount of ₹1,332/- per kit, and contained both exempt and taxable items. The Assessing Officer has treated the entire kit as a “mixed supply” under Section 2(74) of the CGST Act, 2017, on the grounds that the relief kit constitutes a combination of taxable and exempt goods bundled together and supplied for a single price. The officer has drawn a comparison to the supply of gift hampers, asserting that GST should be levied on the entire value of the kit at the rate applicable to the item attracting the highest tax (i.e., 5%).

[YAGAY andSUN]

We hereby request you that please clarify the facts of the matter at initial stage of raising an query so that an appropriate revert can be provided within the frame work of GST Laws.  However, based on the updated facts—that the COVID-19 Relief Kits were supplied for a single consolidated price of ₹1,332/- per kit (without item-wise pricing)—the Assessing Officer’s treatment of the supply as a “mixed supply” under Section 2(74) of the CGST Act, 2017, carries substantial legal standing, but it can still be legally challenged with strong reasoning, considering the purpose, nature, and public service context of the supply.

Below is a formal and reasoned representation that balances legal defense with the humanitarian context of the supply:

[On Official Letterhead of Supplier/Respondent]

To

The Assistant Commissioner / Superintendent

[Jurisdictional GST Office]

[Address]

Subject: Representation Against Classification of COVID-19 Relief Kit as Mixed Supply under Section 2(74) of CGST Act, 2017 – Reg.

Reference: Assessment Order / Notice No. __________ dated __________

GSTIN: __________

Respected Sir/Madam,

We write in reference to the assessment proceedings initiated under the above-referenced notice, wherein the supply of COVID-19 Relief Kits to the District Administration during the pandemic has been classified as a “mixed supply” under Section 2(74) of the Central Goods and Services Tax Act, 2017. The assessing authority has thereby proposed to levy GST on the entire kit value of ₹1,332/- at the highest applicable rate of 5%.

While we acknowledge that the kits contained both taxable and exempt items and were supplied for a consolidated consideration, we respectfully submit that the present case does not fall within the mischief intended under Section 2(74), and the assessment must be reconsidered for the following legal and contextual reasons:

1. Purpose of Supply – Public Welfare, Not Commercial Gain

The COVID-19 Relief Kits were supplied exclusively to the District Administration as part of the government-led humanitarian relief operations during the national emergency. These supplies were not made for commercial gain, nor marketed as bundled retail packages akin to “gift hampers” or combo sales. The intention was public service, and the kits were standardized and provided in accordance with government instructions, often under fixed funding constraints.

The CBIC, in its various communications during the pandemic, recognized the unique public purpose nature of such supplies. They cannot be equated to promotional or commercial mixed supplies meant for profit.

2. Not a "Mixed Supply" in True Sense – No Artificial Bundling

Section 2(74) of the CGST Act defines “mixed supply” as a supply made for a single price, comprising two or more individual supplies that are not naturally bundled.

In this case:

• The items were not artificially bundled by the supplier; they were mandated or suggested by the State authorities (e.g., aata, daal, oil, spices, etc.).
• These goods, though priced collectively, were intended to meet basic survival needs, and their bundling was natural and essential, not arbitrary.

This makes the supply more aligned with composite objectives of relief rather than a mixed supply purely for tax purposes.

3. Exempt Supplies Should Retain Their Nature

Even if the kit is priced as a whole, a relief-driven package should not override the tax status of each item, particularly where:

• Exempt items (e.g., rice, pulses, flour, salt) form the major portion of the value, and
• Taxable items are minimal in quantum and value.

The intent of GST law is not to tax exempt supplies indirectly by recharacterizing their supply mode. The relief kits, being a temporary and necessity-driven construct, should not result in tax cascading.

4. Principle of Interpretation – Substance Over Form

In interpreting taxation statutes, courts have held that substance must prevail over form, especially where public interest is involved. In this case, the entire supply was meant to support citizens during a national emergency. Applying the strictest interpretation and levying GST on exempt goods defeats the social objective and contravenes the spirit of government relief policy.

5. International and Domestic Precedent

Globally and in India, government relief and donation-based supply programs during emergencies are treated favorably under tax laws. For instance:

• Exemption notifications were issued for COVID-related goods.
• Relief packages were exempted from customs duty, considering the public need.
• Taxing such essential supplies retroactively adds financial burden to vendors who contributed during a crisis.

Our Humble Request

In light of the above, we respectfully request your kind office to:

• Reconsider the classification of the Relief Kit as a mixed supply.
• Allow item-wise taxability to apply based on the nature of goods, even though the kit was priced collectively.
• Alternatively, treat the supply as composite for public relief purpose with exempt items forming the dominant portion, applying nil or reduced rate to the entire kit.

We are ready to provide:

• Break-up of cost composition of the kit (exempt vs. taxable goods),
• Government order/purchase request letters,
• Any additional documentation your office may require.

Thank you for your understanding and consideration.

Yours faithfully,

For [Name of the Entity]

[Authorized Signatory]

Name: ___________________

Designation: ______________

Mobile: ___________________

Email: ____________________

Place: ____________

Date: _______________

Enclosures:

1. Copy of Invoice / Supply Order
2. Cost break-up of COVID-19 Relief Kit contents
3. Relevant Government correspondence / directions
4. Supporting circulars or notifications (if any)

***

[Sadanand Bulbule]

Dear Yagay & Sun

Here is a supplementary query:

The taxpayer in dry fruits supplies large quantity of "Corporate Gift Hamper" with Gold Coin etched with buyer company's logo packed inside such hamper and issues tax invoice for a single price.

The definition of Section 2[74] " mixed supply" reads as under:

(74) “mixed supply” means 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;

Illustration: A supply of a package consisting of canned foods, sweets, chocolates, cakes, dry fruits, aerated drinks and fruit juices when supplied for a single price is a mixed supply. Each of these items can be supplied separately and is not dependent on any other. It shall not be a mixed supply if these items are supplied separately.

My take:

Since Gold Coin packed in a gift hamper containing mainly dry fruits for a single price, there is no conjunction at all between such gold coin and dry fruits. One is edible and another is a precious metal. With this I understand that, such supply does not fall under the category of mixed supply as defined above.

However what would be rate of tax on such gift hamper containing gold coin which is unconnected with dry fruits? Can it be called as an independent supply attracting two unconnected goods breaking the price of each of these two goods individually?

Plz offer your comments

[YAGAY andSUN]

Counter query:-

Can Gold coin be given as Covid - 19 relief or not?

[MAHTAB KHAN]

Apologies for any confusion caused earlier. As clarified, the actual position remains as previously explained. The relief kit is priced at ₹1,332/- per kit, and the total amount of the invoice is ₹1,332/-. The invoice was duly issued for the kit in question, with all items clearly itemized, including respective quantities, weights, rates, and applicable GST.

• Exempt Amount: ₹1,170
• Taxable Amount: ₹370
• GST (5%): ₹18.50
• Total Invoice Value: ₹1,170 (exempt) + ₹370 (taxable) + ₹18.50 (GST) = ₹1,332

[YAGAY andSUN]

We respectfully clarify that the COVID-19 Relief Kits supplied to the District Administration during the pandemic were invoiced at ₹1,332/- per kit, with a detailed item-wise breakdown. The invoice clearly itemizes each component of the kit along with respective quantities, weights, unit rates, and applicable GST. The exempt goods (such as flour, rice, pulses, potatoes, and salt) amounted to ₹1,170/-, while taxable goods (such as roasted chana, mustard oil, and various spices) amounted to ₹370/-, attracting GST at 5%, i.e., ₹18.50. The total invoice value is the sum of these individually identified items, not a lump-sum amount without breakdown.

In light of this, the treatment of the supply as a "mixed supply" under Section 2(74) of the CGST Act, 2017 is not legally tenable. A mixed supply requires goods to be bundled together for a single, indistinct price without identification of individual components, which is not the case here. As each item is independently listed and taxed or exempted as per its nature, the supply should be treated as a combination of individual supplies, each assessed according to its applicable GST rate or exemption. We request your kind reconsideration of the classification and the tax demand raised.

[YAGAY andSUN]

To

The Assistant Commissioner / Superintendent

[Jurisdictional GST Office]

[Address]

Subject: Clarification and Submission Regarding Classification of COVID-19 Relief Kit under GST

GSTIN: [Insert GSTIN]

Reference: Your Notice No. [Insert Reference No.] dated [Insert Date]

Respected Sir/Madam,

This is with reference to the above-mentioned notice issued in connection with the supply of COVID-19 Relief Kits by us to the District Administration.

At the outset, we respectfully clarify and reassert the following factual position:

The supply in question pertains to COVID-19 relief kits supplied during the pandemic under official instructions of the District Administration. Each kit was priced at ₹1,332/-, and was billed through a single invoice, which also clearly itemized all contents of the kit, including the quantities, weights, unit rates, tax applicability, and respective GST treatment.

The break-up of the invoice is as follows:

• Exempt Supplies (as per Notification No. 2/2017-Central Tax (Rate)):

  • Aata (10 kg), Chawal (10 kg), Daal (2 kg), Aaloo (5 kg), Namak (500 gm) – Totaling ₹1,170

• Taxable Supplies @5% GST:

  • Bhuna Chana (2 kg), Sarso Tel (2 ltr), Dhaniya, Mirch, Haldi Powders (100 gm each) – Totaling ₹370

  • GST @5% on ₹370 = ₹18.50

Thus, the total invoice value was ₹1,332/-, being the sum of exempt value (₹1,170), taxable value (₹370), and applicable GST (₹18.50).

We respectfully submit that since each item in the relief kit was clearly and separately itemized, and was not bundled into a single consolidated price without distinction, the supply does not fall under the definition of “mixed supply” under Section 2(74) of the CGST Act, 2017.

The key criteria for a “mixed supply” is that multiple goods or services must be supplied together for a single price, without any individual identification. That is not the case here. Each item was clearly identifiable, separately listed with its own rate and tax applicability, and the total price was a mathematical sum of the individually priced components.

The supply of these kits was made in good faith and under emergency relief arrangements, with full transparency in pricing and invoicing. Therefore, the classification of the entire kit value as taxable under the highest applicable GST rate does not align with the legal framework or the facts of the case.

We respectfully request your good office to reconsider the classification applied and to uphold the original treatment where exempt items remain exempt, and GST is levied only on the taxable components.

We are enclosing the sample invoice and item-wise summary for your reference.

Thanking you,

Yours faithfully,

For [Name of Entity]

[Authorized Signatory]

Name: ____________

Designation: ____________

Place: ____________

Date: ____________

Enclosures:

1. Copy of Invoice

2. Item-wise breakup summary

[YAGAY andSUN]

Law Evolves but facts remain constant.

[Sadanand Bulbule]

Dear Sir

It has nothing to do with COVID-19.

But giving such corporate gift hampers with gold/ silver items is the prevailing practice in the country as a memento to the esteemed customers and guests/ visiting dignitaries. 

Here the question is whether two & more goods sold for a single price are predominantly in conjunction with each other? Unless it is established, there is no forward journey to reach the platform of Mixed Supply. 

[KASTURI SETHI]

Dear Sir,

When we talk of Relief Kit, Combo pack, Gift pack, single price is to be charged. The exempted items or items attracting lower rate of tax (packed in the kit, combo pack, gift pack for promotional purpose or for any other purpose) shall also be charged at highest rate of tax.