GST Ruling on Stationery Kits: Mixed Supply vs Composite Supply
The Gujarat Authority for Advance Ruling decided that stationery kits sold as a bundle are mixed supplies, not composite supplies.
- Ruling
- GUJ/GAAR/R/2022/52 dated 30/12/2022
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- Doms Industries asked if stationery kits are composite or mixed supplies.
- The authority ruled these kits are mixed supplies.
- Mixed supplies are taxed at the highest rate applicable to any item inside.
- The HSN code must match the item with the highest tax rate.
In short
The company asked whether selling stationery kits containing pencils, sharpeners, and erasers for one price counts as a composite supply. A composite supply is a bundle of goods naturally sold together, while a mixed supply is a bundle of items that could easily be sold separately. Because these stationery items are commonly sold as individual products, the authority decided they do not form a natural bundle.
What has changed
How it worked before
Many businesses assumed that selling a kit of related stationery items for a single price qualified as a composite supply, allowing them to tax the entire kit at the rate of the main item.
What has changed
The authority ruled that these kits are mixed supplies. In practice, this means you cannot use the tax rate of the primary item if other items in the kit have a higher tax rate. You must identify the item in your kit with the highest GST rate and apply that rate to the entire bundle.
Who this affects
Stationery manufacturers, gift pack sellers, and businesses that bundle different products together for a single price.
An example
Imagine a business sells a 'Back to School' kit containing a pencil (12% GST) and a sharpener (18% GST). The business asks if they can tax the whole kit at 12%. Based on this ruling, the answer is no. They must tax the entire kit at 18% because that is the highest rate among the items included.
What you should do
Review your product bundles to see if they contain items with different tax rates. If you sell bundles, you must apply the highest tax rate found among the items in that pack. Remember, this ruling only applies to the company that asked; it is not a law that automatically changes how your specific business must report taxes.
If you do nothing
If you incorrectly classify a mixed supply as a composite supply, you will underpay your GST. Tax officers may issue a notice for the tax shortfall, plus interest and penalties. Relying on a ruling meant for another company does not protect you from these consequences.
The terms explained
- Composite Supply
- A bundle of goods or services that are naturally sold together in the ordinary course of business, where one item is the main product.
- Mixed Supply
- A bundle of two or more products sold for a single price that are not naturally bundled and could be sold separately.
- HSN Code
- A standardized system of numbers used to classify goods for tax purposes.
The ruling in detail
Authority for Advance Ruling
M/s. Doms Industries Pvt. Ltd.
GUJ/GAAR/R/2022/52 dated 30/12/2022 · Gujarat
Questions before the authority
- Whether the supply of Pencils Sharpener along with Pencils being the Principal supply will be considered as the Composite Supply or Mixed Supply.
- What will be the HSN code to be used by us in above case.
- Whether supply of Sharpener along with the kit having a nominal value will have an impact on rate of tax. If yes, what will be rate of tax and HSN code to be used by us.
Facts
The applicant manufactures and supplies various stationery items, including pencils, sharpeners, and erasers. They sell these items in bundled packs, such as the Doms A1 Pencil pack, Doms Smart Kit, and Doms My First Pencil Kit, for a single price. The applicant sought a ruling on whether these bundled supplies qualify as composite supply or mixed supply for GST purposes.
Ruling
| Question | What the authority ruled |
|---|---|
| Classification of supply | Mixed Supply The supply of Pencils Sharpener along with Pencils is covered under the category of Mixed Supply. |
| HSN code to be used | HSN code of the particular supply which attracts the highest rate of tax As discussed in Para 21.1. |
| Impact of sharpener on tax rate | Yes, it will have an impact on the rate of tax The applicant is liable to pay the highest tax rate and use the HSN code of the supply having the highest rate. |
The Authority ruled that the supplies in question are classified as mixed supply rather than composite supply. Consequently, the tax liability must be determined based on the item within the bundle that attracts the highest rate of tax. The applicant is required to use the HSN code of that specific item with the highest tax rate.
Reasoning
The Authority determined that the items in the kits are not naturally bundled in the ordinary course of business, as they can be and are sold independently. Because the conditions for composite supply under Section 2(30) of the CGST Act were not met, the supplies were categorized as mixed supply under Section 2(74). Under Section 8(b) of the CGST Act, a mixed supply is treated as a supply of that particular supply which attracts the highest rate of tax. Therefore, the applicant must apply the highest tax rate and corresponding HSN code present in the bundle.
Provisions relied on
- Section 2(30) of the CGST Act, 2017
- Section 2(74) of the CGST Act, 2017
- Section 8 of the CGST Act, 2017
- Notification No. 1/2017-CT (Rate) dated 28-6-2017
For the practitioner
This ruling clarifies that stationery kits containing multiple items sold for a single price are **Mixed Supply** and not Composite Supply. Practitioners should advise clients that the entire bundle will be taxed at the **highest rate** applicable to any single item within that bundle. It does not decide the classification of individual items, only the nature of the bundled supply.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/gujarat_aar_order_no.52-2022_doms_industries_pvt_ltd.pdf
Legibility of the scan, as read: high.
Prepared 20-10-2026.
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