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TMI Blog2021 (1) TMI 493X X X X Extracts X X X X X X X X Extracts X X X X ..... inition under Section 2(74) of the CGST Act, 2017, '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. He has stated that as per the above definition it can be clearly seen that there should be a single price for two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person and in this case the applicant will charge separate price on all products; that as each of these items can be supplied separately and is not dependent on the other, they cannot be classified as composite supply; that the customer can buy all the three items together or any single item separately and therefore the applicant shall charge tax on each item separately as per the applicable tax rate on such item; that there shall not be a single highest rate of tax charged on total amount of the invoice as per the definition of mixed suply. The applicant has concluded his submission by stating that accordingly, the said supply of goods shall not be treated as 'mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicant is not the tobacco, which is used in cigarettes or biris but chewed or held in the mouth, typically between the cheek and gums and is, therefore, called the Chewing Tobacco. But, before dwelling on the issue of whether the above is a mixed supply in GST or otherwise, we feel it necessary to find out under which sub-headings each of the above 3 items fall and what is the GST liability on each of them. 6. In order to determine the classification of the above 3 items, we will be first required to refer to the Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 containing the headings, sub-headings as well as the rates of Central Tax GST applicable to various goods which are covered under 6 schedules as under: (i) 2.5 per cent. in respect of goods specified in Schedule I, (ii) 6 per cent. in respect of goods specified in Schedule II, (iii) 9 per cent. in respect of goods specified in Schedule III, (iv) 14 per cent. in respect of goods specified in Schedule IV, (v) 1.5 per cent. in respect of goods specified in Schedule V, and (vi) 0.125 per cent. in respect of goods specified in Schedule VI Further, Explanation (iii) and (iv) of the said Notification re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TES; "HOMOGENISED" OR "RECONSTITUTED" TOBACCO; TOBACCO EXTRACTS AND ESSENCES - Smoking tobacco, whether or not containing tobacco substitutes in any proportion : 2403 11 -- Water pipe tobacco specified in Sub-heading Note to this Chapter: 2403 11 10 --- Hookah or gudaku tobacco 2403 11 90 --- Other 2403 19 -- Other: 2403 19 10 --- Smoking mixtures for pipes and cigarettes --- Biris: 2403 19 21 ---- Other than paper rolled biris, manufactured without the aid of machine 2403 19 29 ---- Other 2403 19 90 --- Other - Other : 2403 91 00 -- "Homogenised" or "reconstituted" tobacco 2403 99 -- Other : 2403 99 10 --- Chewing tobacco 2403 99 20 --- Preparations containing chewing tobacco 2403 99 30 --- Jarda scented tobacco 2403 99 40 --- Snuff 2403 99 50 --- Preparations containing snuff 2403 99 60 --- Tobacco extracts and essence 2403 99 70 --- Cut-tobacco 2403 99 90 --- Other 8.1 From the above, it can be seen that Chewing Tobacco appears at Sub-heading No.24039910 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). Further, as per Notification No.01/2017-Central Tax (Rate) dated 28.06.2017, the said item appears at Sr. No.15 of Sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o through the definitions of both 'composite supply' and 'mixed supply' as defined under Section 2 of the CGST Act, 2017 in order to find out whether the above would be covered under the definitions of 'composite supply' or 'mixed supply'. 10.1 Composite supply, is defined as per Section 2(30) of the CGST Act, 2017 and reads, as under: "composite supply" means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply; Illustration.- Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a principal supply;" 10.2 As per the submission of the applicant, he wants to carry on the trading activity of Grated Supari, Lime and Chewing Tobacco by putting them together in a transparent plastic pouch for the sake of easy carry by the customer and all the items will have separate price and will be shown in the invoice as a separate bill of item and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... slaked lime and sweet or savory flavourings, in India, Pakistan, other Asian countries, and North America". 10.3 It can be seen from the above that Gutkha, which in itself is a combination of grated supari, slaked lime, chewing tobacco and some other flavouring ingredients is similar in nature to the combination mentioned hereinabove. Gutkha is an item which is easily available in the open market, is widely popular across the country and consumed by crores of people across the length and breadth of India. Thus, it can be said that the combination formed by mixing required proportions of grated supari and slaked lime with chewing tobacco results in a product similar in nature to gutkha (without the sweet or savoury flavourings). Further, even when an individual goes to a pan shop and asks for the above combination known popularly as 'mawa' in Gujarat, the pan shop owner will give the 3 items i.e. grated supari, slaked lime and chewing tobacco separately so as to enable the person to mix them as per his requirement before consuming it. We also find that the precise reason why the applicant wants to supply the above 3 items in a single transparent plastic pouch, although packed sepa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) a composite supply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply; and (b) a mixed supply comprising two or more supplies shall be treated as a supply of that particular supply which attracts the highest rate of tax." 11.1 So, in view of Section 8(a) above, it can be seen that a composite supply comprising of two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply. Therefore, in the instant case, since chewing tobacco is the principal supply in the composite supply of goods as discussed earlier, the said composite supply of goods would be treated as a supply of chewing tobacco falling under Tariff Item 24039910 of the First Schedule to the Customs Tariff Act, 1975 (1 of 1975). The same appears at Sr.No.15 of Schedule-IV of the Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 [on which GST liability is 28% (14% CGST + 14% SGST)]. The same reads, as under: Sr.No. Chapter/Heading/Sub-heading/Tariff item Description of goods 15. 2403 Other manufactured tobacco and manufactured tobacco substitutes; "homogenised" or "reconstituted" ..... X X X X Extracts X X X X X X X X Extracts X X X X
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