Two or more than two things, two or more than two things
are being supplied, naturally they are bundled together.
What am I saying? Sir, what are you saying?
What are you saying, sir? We are not understanding anything.
We feel that you have gone mad.
We feel that the time has come to send you to the madhouse
in Agra.
I am saying, son, listen to me for two more minutes.
After that, whatever you say, I will do as you say.
I am just saying that we are discussing composite supply.
And I want to know what composite supply is.
Composite supply is basically a supply in which you are
supplying two or more than two things, goods or services.
It could be one good or one service.
It could be one product or one service.
It could be two products or one service.
It could be anything.
It could be any combination.
But you are supplying two or more than two things.
Is the point clear so far?
And that supply is naturally bundled.
It is not an artificial bundle.
Naturally bundled means that usually in business practice,
usually in everyday life, those things are supplied
together.
For example, I will give you the best example.
I will give you the best example.
There is a toffee in my pocket at this time.
Can you see it?
There is a toffee in my pocket at this time.
If you look at this toffee, you will see that two things
are being supplied.
One is that the toffee inside it is already there.
But at the same time, this toffee that is being given to me
in a packet, this is also being supplied.
Will that shopkeeper give me such an open toffee?
No. He gives me toffees in a packet.
Can you see this toffee?
He gives me toffees in a packet.
So, two things are being supplied.
One is of a packet and one is of a toffee.
Two things are being supplied.
One is of a packet and one is of a toffee.
But what does this mean?
You tell me.
First, tell me, is this a natural process?
Is this a common business practice?
That I will go to buy a toffee.
If I go to any shop to buy a toffee, will the shopkeeper
supply me a toffee like this?
Or will he give me a toffee in a packet?
Basically, this is called packaging.
He will supply me with packaging.
Usually, in our natural language, on a regular basis, in
our daily life, the toffee that I go to buy, will he give
me a toffee in a packet?
I am getting supplies of two things.
One is of the toffee that I eat, and the other is of the
packaging.
So, two things are being supplied for the company.
First, he is supplying me with packaging.
Second, he is supplying me with a toffee.
This is a clear point.
Is the point clear?
Try to understand as much as I am teaching you.
For example, you go to the market to buy a laptop.
You go to the market to buy a laptop.
You buy a laptop.
You ask that person,
How much is this laptop worth?
Tell me a good quality one.
He says, it is a laptop worth Rs. 50,000.
Okay.
But if you have ever observed, whenever you go to buy a
laptop, he does not just give you a laptop.
He also puts some software in the laptop.
And not only this, apart from the software, he gives you a
bag to carry the laptop.
He gives you a laptop bag.
If you have ever observed, he gives you a laptop bag for
free.
In this case, what are the things being supplied?
Is there a single thing being supplied for the laptop?
No.
He is giving you a laptop.
He is also putting some software in it.
And along with that, he is also giving you a laptop bag for
free.
Does this practice usually work in business?
Or is the shopkeeper doing something special?
Usually, if you go to any shop, if you go anywhere to buy a
laptop, the laptop is provided to you in the same way that
the shopkeeper is providing it to you.
Along with the laptop, the laptop bag is given to every
person.
Every supplier will give it to you.
So, usually, in a regular business, these things are
bundled naturally.
Nobody is doing it separately.
Take the third example.
You go to stay in a hotel.
For two days, three days, four days, you go out and stay in
a hotel.
So, what happens in a hotel?
In a hotel, a lot of things are being supplied.
He is giving you a room to stay in.
This is number one.
Number two, the cleaning of that room.
The cleaning of that room is also done regularly.
And not only this, apart from the cleaning of the room,
apart from the cleaning of the room, sometimes you get a
complimentary breakfast.
The breakfast in the morning is free.
Usually, we charge for lunch and dinner, but our breakfast
is free.
Now, how many things are being supplied in this?
In this, two or three things are being supplied.
First of all, accommodation is given to you.
A room is being provided to stay.
Apart from the room, apart from the room, he is giving you
cleaning and housekeeping services.
And apart from the housekeeping service, he is also giving
you a complimentary breakfast.
Once you remove the complimentary breakfast, just take the
accommodation service, that he has given you a room to stay
in, and the housekeeping services are provided.
Is he doing anything special?
This hotel guy, friends, I want to know from you, will
anyone tell me?
Is there anyone?
Is there anyone who can tell me, that this hotel guy, is he
doing something special?
Is he doing something special?
Or is he doing the same thing which is usually a business
practice?
Is he doing a favor to us by providing housekeeping
services?
Housekeeping services, if a person comes to clean the room,
or if a jug of water is empty, then he will fill that jug
with water.
He will clean the bed, he will change the bedsheets, he
will change the pillow cover, he will clean the cupboard.
Are there such people in the hotel?
So, these services that the hotel guy is giving me, by
providing these services, is he doing a favor to me?
He is not, right?
This is a common business practice.
You can go to any hotel, a five-star hotel, or you can go
to any cheap hotel.
You get all these services there as well, friends.
This is a part of a business practice.
These are all naturally bundled.
When I say business practice, it means that all these
things are naturally bundled.
To see them separately, that what is the rate of this, what
will be the value of this supply, and what will be the
value of this supply, to see them separately, it is quite
impossible.
What to do?
There were a lot of complexities in life.
There are so many things, like the example of the hotel,
there is a service for housekeeping, and there is a service
for accommodation.
So, how to apply GST on this?
Apply it separately on the housekeeping service, and apply
it separately on the accommodation service, and make it
total.
Or apply it only on the housekeeping service, or apply it
only on the accommodation service.
On whom should we apply it?
At what rate should we apply GST?
There were a lot of problems.
But when the problem arises, like I told you, how? How? How
will this work?
So, why should you be clear?
The reason was, why the government?
What was the reason of the government?
The government had an example of the old tax system, of the
old indirect taxation system, that all these problems used
to happen there.
So, this time they specified it.
They had a reason that the new tax system, the GST system,
has to be simplified a lot.
It has to be simplified a lot.
So, for that, we write everything in the Act itself, so
that in future, we don't have to go through the courts.
So, that is why they fixed one thing in advance, that if
you have a case of supply, a case of supply of more than 2,
then the first thing you have to see is,
this. First you will see if it is naturally bundled or not.
Is this a part of a common business practice? That it is a
common business practice, that is why they are giving
things.
Like when you go to buy a laptop, they give you a laptop
bag along with it.
It is a business practice.
If you buy a toffee, they give you the packaging of the
toffee along with it.
For example, if you go to buy a shirt or a coat, if you go
to buy a shirt, they give you a shirt.
They will pack the shirt in a transparent cloth.
Then a box will come and inside that box, they will keep
the shirt.
They will put a cover on top of it and give it to you.
Here too, two things are being supplied.
Tell me, what are they? Sir, here shirt is also being
supplied and here packaging is also being supplied.
Here too, two things
are being supplied.
Is it naturally bundled? Is it naturally bundled? Yes, it
is a common business practice.
By giving the box, by giving the packaging, is anyone doing
a favour on me? No one is doing a favour on anyone, sir.
This is a normal business practice that whenever you go to
buy a shirt, they will pack it in a box and give it to you.
So, this is also
naturally bundled.
Do you understand the meaning of naturally bundled? Two or
more things are being supplied.
It is naturally bundled.
It is a business practice.
So, how will GST be imposed on this? At what rate will it
be imposed? On which activity? On which supply will it be
imposed? The solution to this is, in this case, see which
is the principal supply? And whichever is your principal
supply, whichever is your principal supply, on that
the tax rate will be imposed on the entire supply.
For example, what am I saying? I
said that if you feel that two or more things are being
supplied and it is naturally bundled, it is a common
business practice to supply both the things at the same
time.
It is a
quite normal practice of the business, of the trade.
In that case, you have to see what the principal supply is.
For example, this toffee, what is the principal supply in
this?
The principal supply in this is toffee.
Packaging is not its principal supply.
If I go to a person, to a shopkeeper, I tell him, brother,
give me toffee.
I tell him, brother, give me toffee.
I tell
him, brother, give me toffee.
He is giving me toffee thinking it is toffee.
Can I do
this? Can I go and tell him, brother, I don't want toffee,
give me its packaging? What is the principal supply? What
do you say to the shopkeeper? I want toffee.
Do you say that
I don't want toffee, I just want its packet? Take this one
rupee toffee, give me one rupee
packet separately.
Can this be done? No.
So, what is the principal supply? What is the
main thing? What is the main thing that is being supplied?
Toffee supply.
So, the GST rate, which is the rate of toffee, that will be
applied to all the supply.
As an example, as an example, understand that if my 75
paise, for example, of toffee or 70 paise, for example,
are used to make toffee and my packaging is of 20 paise,
then the total cost will be 90
paise. Our concern is that should we apply GST on 70 paise
separately and apply it on 20 paise separately or apply it
at the same rate? So, he said this, the act specified this
that, brother, first see which is the principal supply.
Your principal supply is not of packaging.
You are not giving me the main thing packet.
You are giving me the main thing toffee.
Packet is only to protect it, to protect it, to keep it
safe from germs and bacteria, to save it, friend.
What is the main thing? Toffee.
So, on this toffee, if there is a rate of 10%, then the
rate of 10% will be applied on this 90 paise.
Suppose, if there is a rate of 15% on this, then the rate
of 10% will be applied on this 90 paise.
Suppose, if there is a rate of 15% on this and a rate of
10% on this, then also we apply a rate of 10% only.
Why? Because what is the principal supply? Toffee, not
packet.
For example, I bought a laptop worth 50,000 rupees and
brought it.
Is the laptop bag
giving me for free? Is it doing me a favour by giving me
for free? No, it is not.
Is it naturally bundled? Yes.
Is it normal business practice? Yes.
Is it normal business practice
to give a laptop bag? Yes.
Is it normal business practice to give a laptop bag? Yes.
Is it
If you had to buy a laptop bag, would you go and buy it
from anywhere for Rs.
500, Rs.
700, Rs.
Nobody spends Rs. 50,000 for that.
I am not buying a laptop to buy a laptop bag.
I am buying a laptop because I am being given a laptop bag.
So what is the principle supply?
Laptop.
If I go to a laptop shop, a Lenovo shop or a Dell showroom,
would I ask them to give me a laptop bag?
Or would I ask them to show me a laptop?
I would simply ask them to show me a laptop.
They are giving me a complimentary laptop bag.
So what is the main thing? What is the principle supply?
The principle supply is a laptop.
So in the case of GST, if they had broken it up, that a
laptop costs Rs.
59,000 and a bag costs Rs.
For example, a bag costs 12% and a laptop costs 18%.
So would I show them separately or would I see what the
principle supply is?
The principle supply is a laptop.
So the supply of Rs.
50,000 and the rate of the principal supply of 18%, that
will be charged.
Next example.
Let's go to the hotel example.
What was in the hotel example?
That I am going to stay in a hotel for 3-4 days.
What is the main supply?
Is it the hotel room or is it the complimentary breakfast?
Or is it the housekeeping services?
If I take an entry in a hotel, what do I say to the
receptionist?
I say, Madam, I want a nice room.
And there are so many of us, 2, 4, 6 people.
So please give us this much room.
And I want these facilities in this room.
I want a nice AC or TV.
I will say that I want a room.
Will I say, Madam, I have come here and I want to have
breakfast for free.
That is why I am booking a room in the hotel.
I will tell the receptionist that I want to book a room.
I will not say that I want to have breakfast for free.
That is why I am booking a room in your hotel.
Or I like your housekeeping services.
That is why I am booking a room.
So that I get housekeeping services.
What is the principal supply?
It is the accommodation.
So if there are different rates.
For example, there is a room for Rs. 10,000 per day.
And let's say there is a rate of 18% for GST.
And if there is housekeeping or breakfast services, the
receptionist will tell you that it is Rs.
It is their own calculation.
That we get breakfast for Rs. 1,000 for free.
And the rate is, for example, 28%.
And they tell you that our room will cost Rs. 11,000 per
day.
So at what rate will GST be charged?
Above 18% or above 28%?
Sir, GST is charged for the principal supply.
What is the principal supply in this? Is housekeeping
service the principal supply?
I will tell the receptionist that I need to clean the room.
That is why I am booking a room for you.
Or I need breakfast for free.
That is why I am booking a room.
I will tell them that I want to stay here.
That is why I am booking a room.
So the rate of accommodation.
The rate of accommodation will be charged on your total.
Or above Rs. 11,000, your charge of 18% will be charged.
This is the point, sir.
The rate of principal supply will be charged.
Let us understand the last example and then wind up.
For example, aviation services.
The services of airlines.
The services of air traffic control.
What happens in the service of air traffic control?
Basically, what is it?
If you ever go to air traffic control, first of all, you
will take entry at the airport.
There are some free lounges at the airport.
There are places where you can relax.
There are sofas there.
There is a TV there.
There is a very relaxing chair.
You can sit there comfortably.
You can sit there comfortably and watch TV.
They give you a free lounge at the airport.
After that, a bus arrives.
That bus takes you from the airport to the place where the
aeroplane is parked.
After that, as soon as you board the aeroplane, you get a
glimpse of the airport.
of girls, whom we call Air Hostess, Air Hostess is also
provided to you.
After that, when the flight leaves, in between you have the
facility that you can order some food items, you can order
some sandwich or food, sometimes you can order drinks, you
can order juice etc.
These facilities are also provided to you.
Sometimes entertainment facilities are
also provided to you.
Now you tell me, when you go to any travel agent to book a
flight ticket, what do you tell him? That I have to go from
Delhi to Mumbai, so book me a flight ticket, or I have
fallen in love with some Air Hostess, wherever she goes,
Air Hostess will fly, I will also fly with her, I will also
fly with her, I will fly with her, I will fly with her, I
will fly with her, I will fly with her, I will fly with
her, I will fly
with her, I will fly with her. I will fly with her, I will
fly with her.
You can't sell these things. You can sell these things
separately.
Sir, what is the example of this?
You were giving examples of a lot of things.
Sir, can you give an example of milk supply?
I will tell you sir.
You remember, if you go to Rakshabandhan shops or if you go
to shops during Diwali,
you get a basket in a very big shop.
You get a basket in a very big shop.
In that basket, there are 2-3 juices, 2-3 cold drinks, 1-1
chips, 2-3 chocolates.
And they pack it from the top.
And they say that it is for Rs. 500 or Rs. 250.
And what are those cold drinks?
There is a Coke, a Thumbs Up, a dairy milk chocolate, a 5
star,
there is a packet of Kurkure, there is a packet of Lays,
there is a packet of Bingo.
They mix everything and make a set in a basket.
They do a good packaging and supply it to you.
Tell me one thing, can Bingo, Coke, Thumbs Up, 5 star,
dairy milk be sold separately?
Yes or no?
Can these things be sold separately?
Do they have a brand value in the market?
Can these things be sold separately?
I know that dairy milk will cost Rs. 10-20, 5 star will
cost Rs. 10-20.
Coke will cost Rs. 35-40.
I can sell them separately.
There are individual supplies.
I can sell them separately.
But still, I am selling them collectively.
They can be sold separately.
But still, I am selling them together.
In that case, there is a mixed supply.
I am selling GST at Rs. 500.
So, which GST rate will be applied?
Coke's rate may be different.
5 star's rate may be different.
Kure's GST rate may be different.
So, which rate will be applied?
Sir, the rate will be applied on the highest rate of all
the things that you are supplying.
That highest rate will be applied on your total value of
supply.
Do you understand what I am saying?
I want to say that,
like this is a very big basket.
In this, you have Thumbs Up.
In this, you have Coke.
In this, you have 5 star.
In this, you have dairy.
In this, you have Kure.
Now, for example, Thumbs Up's rate is 18%.
Coke's rate is 28%.
Dairy milk and 5 star's rate is 12%.
And Kure's rate is 5% of GST.
I am saying that,
he is supplying me a total of Rs. 500.
I am being supplied a total of Rs. 500.
GST's rate is Rs. 500.
Rs. 70.
Rs. 500 is fine.
I have got the value of supply.
Now, which GST rate should I apply?
Should I apply Rs.
18, Rs.
28, Rs.
12 or Rs.
Things are being supplied at the same time.
Although, they could have been supplied separately.
Sir, GST's rate will be applied in this.
In this entire supply,
which item has the highest rate?
I can see that it is Coke.
Coke's rate is 28%.
Rate of 28%.
So, the rate applied on Rs. 500 will be of 28%.
This is a mixed supply.
Mixed supply means,
you are supplying more than Rs. 2 or Rs. 2.
But, they are not bundled naturally.
You can sell them separately in the market.
That is fine.
You are selling them together.
You can sell them separately in the market.
In that case, the highest rate
will be applied on that rate.
What is this?
Look at its meaning.
Mixed supply means,
two or more individual supplies
of goods or service or any combination
made in conjunction with each other
for a single price
and supply does not constitute composite supply.
It is not a composite supply.
So, what is not a composite supply is a mixed supply.
And, everything is being given at a single price.
Look at this example.
A shopkeeper is giving a bottle of water
and a fridge.
So, the bottle and the fridge can be sold separately.
A water bottle can be sold separately
and a refrigerator can be sold separately.
It is not that they will sell separately.
So, that is a mixed supply.
Now, the rate of GST in the mixed supply
is of the bottle of water
and the rate of GST in the refrigerator.
Compare both.
At that rate, your GST will be charged.
Mixed supply comprising of two or more supplies
shall be treated as
supply of that product
that attracts highest rate of tax.
So, this was the point.
This was the point.
Composite supply is different
and mixed supply is different.
I am putting a lot of effort
in teaching these things.
I am putting a lot of effort
so that you don't have to
think too much
and as it is,
your ideas come to your mind.
As it is,
your ideas come to your mind.
You don't have to refer
to textbooks in everything.
I have always tried
to simplify things
in such a way
that the reader enjoys it.
I am reading something
and they feel that
it is a normal discussion.
You must have seen
12-15 lectures.
Have you ever felt
that a teacher is teaching you?
First of all,
I don't consider myself a teacher.
I still consider myself
a student of this subject.
I swear.
I don't lie.
I still consider myself
a student of this subject.
If you don't consider yourself
an expert of this subject,
you stop learning.
You stop learning.
Sir, I have always tried
to simplify things.
You must be thinking
that it is not a teacher-student thing.
It feels like
an elder brother is teaching you.
You must be thinking
that I don't want to be
a teacher like a school-college teacher.
I am teaching you
the best symbols
like a friend teaches you.
So, friends,
keep reading.
If you still have any doubts,
I will share my WhatsApp number.
You can WhatsApp me.
Thank you, friends.
Bye.