GST Ruling on UPS and Battery Bundled Supply
The West Bengal Authority for Advance Ruling decided that selling a UPS and battery together is a mixed supply, not a composite supply.
- Ruling
- 03/WBAAR/ 2017-18
- Dated
- 21 Mar 2018
- 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
- The company asked if a UPS and battery bundle is a composite supply.
- The authority ruled it is a mixed supply because items are independent.
- Goods are not naturally bundled if they can be sold separately.
In short
The company asked the West Bengal Authority for Advance Ruling (AAR) whether selling a UPS and a battery together for one price counts as a composite supply under the Goods and Services Tax (GST) law. A composite supply is taxed based on the main item, while a mixed supply is taxed at the highest rate among the items included. The authority decided that because you can easily buy a UPS and a battery separately, they are not 'naturally bundled' and therefore qualify as a mixed supply.
What has changed
How it worked before
Many businesses assumed that bundling two related products under a single contract and price automatically qualified as a composite supply, allowing them to apply the tax rate of the primary product to the entire package.
What has changed
The authority clarified that bundling items does not make them a composite supply if they are functionally independent. In practice, this means businesses must now treat such bundles as mixed supplies and apply the highest GST rate applicable to any single item in the bundle to the entire transaction.
Who this affects
Businesses that sell electronic equipment, power backup systems, or any bundled products where the components can be purchased individually.
An example
Imagine a computer store sells a laptop bundled with a separate external printer for one price. Since the laptop and printer are independent devices that are not naturally bundled, this ruling suggests the sale would be a mixed supply. The store would likely have to charge the higher GST rate of the two items on the entire bundle price.
What you should do
If you sell bundled products, review whether your items are truly inseparable. Remember that an advance ruling only binds the specific company that asked and its tax office; it is not a general law for all businesses. If your tax officer disagrees with your classification, you may face disputes, so consult with a tax professional regarding your specific contracts.
If you do nothing
If you incorrectly classify a mixed supply as a composite supply, you may underpay your GST. Tax authorities can demand the difference in tax, along with interest and penalties. Relying on a ruling that does not apply to your specific business model is a significant compliance risk.
The terms explained
- Composite Supply
- A package of two or more goods or services that are naturally bundled and sold together, where one item is the main product and the others are secondary.
- Mixed Supply
- A combination of two or more individual products sold for a single price that are not naturally bundled and could easily be sold separately.
- Naturally Bundled
- Goods or services that are typically sold together in the ordinary course of business and cannot be separated without losing their core function.
The ruling in detail
Authority for Advance Ruling
Switching Avo Electro Power Ltd
03/WBAAR/ 2017-18 · West Bengal
Questions before the authority
- Whether the supply of UPS along with the battery can be treated as Composite Supply within the meaning of Section 2(30) of the CGST/WBGST Act, 2017.
Facts
The applicant is a supplier of power solutions including UPS and batteries. They sought a ruling on whether the supply of a UPS along with a battery, billed under a single contract at a combined price, qualifies as a composite supply. The applicant admits that they also supply these items as separate machines.
Ruling
| Question | What the authority ruled |
|---|---|
| Classification of supply of UPS and battery | Mixed Supply Applicable when supplied under a single contract at a combined single price |
The authority ruled that the supply of a UPS and battery under a single contract at a combined price is to be considered a **Mixed Supply** rather than a composite supply. Because the items are independent and can be supplied separately, they do not meet the criteria for being naturally bundled.
Reasoning
The authority relied on the definitions of composite supply under Section 2(30) and mixed supply under Section 2(74) of the GST Act. It reasoned that for a supply to be composite, the items must be naturally bundled and inseparable in the ordinary course of business. Since a UPS and battery can be purchased separately and are not indivisible, the arrangement constitutes a **mixed supply** as defined in Section 2(74).
Provisions relied on
- Section 2(30) of the CGST/WBGST Act, 2017
- Section 2(74) of the CGST/WBGST Act, 2017
- Section 2(90) of the CGST/WBGST Act, 2017
- Section 8(a) of the CGST/WBGST Act, 2017
- Section 97(1) of the CGST/WBGST Act, 2017
- Section 103(2) of the CGST/WBGST Act, 2017
- Section 104(1) of the CGST/WBGST Act, 2017
- Notification No. 01/2017-Central Tax (Rate) dated 28/06/2017
- Notification No. 41/2017-Central Tax (Rate) dated 14/11/2017
For the practitioner
This ruling clarifies that bundling independent goods under a single price contract does not automatically create a composite supply. Practitioners should note that unless the goods are physically inseparable or functionally indivisible, the tax authorities are likely to classify such arrangements as **mixed supplies**. This decision does not apply to cases where the battery is built-in and inseparable from the UPS.
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/wb_2017-18_03_dated_21032018.pdf
Legibility of the scan, as read: high.
Prepared 15-10-2026.
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