IN CASE OF COMPOSITE SUPPLY, THE RATE OF TAX APPLICABLE TO THE PRINCIPAL SUPPLY IS APPLICABLE TO THE SECONDARY SUPPLY OR SUPPLIES. IF THE PRINCIPAL SUPPLY CONSISTS OF MULTIPLE COMMODITIES WHICH ARE TAXED AT DIFFERENT RATES, THEN WHAT WILL BE THE RATE OF TAX APPLICABLE TO THE SECONDARY SUPPLY OR SUPPLIES. FOR EXAMPLE, A REGISTERED PERSON PURCHASES CERTAIN COMMODITIES WHICH ARE LIABLE TO GST AT DIFFERENT RATES FROM A REGISTERED PERSON AND REQUESTS HIM TO DELIVER THE SAID COMMODITIES AT HIS PLACE OF BUSINESS. THE SUPPLIER HAS TO INCUR CERTAIN EXPENSES SUCH AS PACKING, INSURANCE & FREIGHT FOR DELIVERING THE SAID GOODS. NOW, THE QUESTION IS WHAT WILL BE THE RATE OF GST APPLICABLE TO THE INCIDENTAL EXPENSES INCURRED BY THE SUPPLIER.
In case of composite supply , the rate applicable to principal supply shall be applicable to entire combination. Thus rate of GST applicable on the goods that are being sent by the supplier would also apply to the incidental expenses as well, if same are charged by supplier. However there may be the case in Ex work contract wherein the transporter is engaged directly by consignee, as no transportation charges are claimed by supplier, question of GST thereon does not arise . Rather GST in such case would be payable by consignee under RCM @ 5%.
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