Supply of Pencils Sharpener with pencil Kit -- Whether it is a mixed supply or composite supply--– The applicant is a manufacturer and suppliers of all kind of the stationary items like wooden pencils, sharpeners, erasers, mathematical & drawing instruments, ball point pens, wax crayons & oil pastels and wide range of student art materials. The applicant submitted that supplies may qualify as 'Composite Supply'. Accordingly, the GST rate as applicable on the principal product which in the instant case is pencil/colour pencil/crayons will apply to the complete set. The Applicant sought an advance ruling as to 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, 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. The Authority observed that supplies of Doms Al Pencil, Doms Smart Kit and Doms My First Pencil Kit satisfied all the conditions of mix supply.

Held that:- The Hon’ble Authority held that the supply of Pencils Sharpener along with Pencils is covered under the category of "Mixed Supply". The applicant is required to use the HSN code of the particular supply which attracts higher rate of tax among all the taxable supplies containing in a pack/box. The supply of Sharpener along with the kit having a nominal value will have an impact on rate of tax.