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Mixed supply per Sec 2(74): the tax rate applicable on a mixed supply is the rate of:
AThe lowest-rated component
BThe highest-rated component
CThe principal supply
DThe first invoiced component
Answer & Solution
Correct answer: B. The highest-rated component
1. Sec 2(74) defines mixed supply as two or more independent supplies made together for a single price, not naturally bundled.
2. Sec 8(b) deems the mixed supply to be the supply of that particular constituent attracting the highest rate of tax.
3. Hence a gift hamper of chocolates (18%), aerated drinks (28%) and biscuits (18%) is taxed at 28%.
_Source: ICAI BoS CA Final Paper 8, Ch 3 "Levy and Collection of Tax", §Sec 8(b)_
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