A shop sells a package of two items for a single price. The items are also sold separately and are not naturally bundled, so the package is a mixed supply. Item X (₹600 of the price) attracts GST at…
Question and options
A shop sells a package of two items for a single price. The items are also sold separately and are not naturally bundled, so the package is a mixed supply. Item X (₹600 of the price) attracts GST at 5% and item Y (₹400 of the price) attracts GST at 18%. At what rate is the package taxed?
18%
5%
11.5%
10.2%
Answer and explanation
Correct answer: A - 18%
Section 8(b) of the CGST Act, 2017 taxes a mixed supply as a supply of the item that attracts the highest rate of tax, so the whole package is taxed at 18%. The rate of the higher-value item, a weighted average (10.2%) or a simple average (11.5%) plays no part.
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