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Composite supply is a term commonly used in the context of goods and services taxation. In a composite supply, there are multiple goods or services bundled together to form a single supply. These goods or services are usually provided together in the ordinary course of business, and they are viewed as integral components of a single supply.

The key characteristic of a composite supply is that one of the components is the principal supply, and the other(s) are ancillary or incidental to it. The tax treatment is based on the principal supply; that is, the entire supply is taxed according to the tax rate applicable to the principal supply.

For example, if you purchase a computer with a pre-installed software package, the principal supply is the computer, and the software is ancillary. The entire transaction is taxed based on the tax rate applicable to computers.

Understanding composite supply is essential in tax systems to ensure clarity in determining tax liabilities for transactions involving multiple goods or services.

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Under GST, a composite supply would mean a supply. made by a taxable person to a recipient consisting of two. or more taxable supplies of goods or services or both, or. any combination thereof, which are naturally bundled and. supplied in conjunction with each other in the ordinary.