Composite and Multiple Supplies in Oman VAT


Yarab A | Updated on: November 15, 2021

If you look at the business practice today, you will notice how, very often, two or more goods, or a combination of goods and services, are supplied together. It could be a sales strategy to attract more customers or the nature or type of goods or services that require them to be bundled or provided together.

In Oman VAT, the supplies bundled with two or more goods or services or a combination of goods and services are classified as composite and multiple supplies. In this blog, let's understand the VAT treatment on multiple and composite supplies

Multiple supplies

The supply of two or more individual supplies of goods or services, or any combination of goods and services, by a taxable person, for a single price is called Mixed Supply.

Value of Supply in Oman VAT Time of Supply in Oman VAT

In multiple Suppliers, the combination of goods and/or services is not bundled due to natural necessities.  The supplies that form part of multiple supplies can be financialy and econmoically be seperated from others and can be supplied individually in the ordinary course of business.

Let us understand this with an example.

Consider a kit that contains a tie, a watch, a wallet, and a pen, as a combo


  • Tie, watch, wallet, and pen are bundled as a kit
  • The supply of a tie does not naturally necessitate the supply of other elements (watch, wallet, pen) and vice versa
  • The kit is supplied for a single price

Hence, the supply of the kit is multiple supplies.

Tax calculation on multiple supplies

To calculate the tax liability on multiple supplies, the tax rate applicable for each individual supply forms part of the multiple supplies will be considered. In other words, you need to consider the tax rate applicable for each component of the kit.

Composite supplies

A composite supply means a supply made comprising two or more goods or services, or a  combination of goods and services, provided they are bundled with each other. In simple words, the goods and services are bundled owing to natural necessities, and the components are dependent elements.

A supply will be treated as a Composite Supply only if the following conditions are met:

  • The supply is considered commercially as a single supply

  • The components that make up the supply are closely related to each other

  • These components constitute objectively and practically a single supply that cannot be split from a commercial perspective

  • All components of the supply are essential to make the supply and achieve the commercial aim of the transaction

  • The supply is made in the normal course of activity of the supplier

  • The combination of the supply components does not aim to avoid tax or to increase any input tax refund

Let us understand this with an example,

  1. A 5-star hotel in Mumbai provides a 4 days/3 nights package, with breakfast.

This is a composite supply as the package of accommodation facilities, and breakfast is a natural combination in a hotel's ordinary course of business.

  1. A 5-star hotel in Mumbai provides a 4 day/3 nights package with breakfast and a one-day sightseeing tour package.

The inclusion of a seightseing tour package is not a natural requisite to accommodation service in the hotel. Hence, this does not amount to composite supply. This is multiple supplies.

  1. Sale of Laptop with Bag.

This is a composite supply because a laptop bag is a natural requisite to carry the laptop. But if the customers opt for a multipurpose bag like a backpack bag, it is not a composite supply since it is not naturally bundled.

Tax calculation on multiple supplies

To calculate the tax liability on composite supplies, you need to consider the tax rate applicable, taking into account the commercial purpose of the transaction. For example, in the package of accommodation and breakfast, the commercial objective is the accommodation.

The implication of composite and multiple supplies will be high if the components that form part of the supply belongs to different tax rates, like some are taxable and few are exempt or zero-rated. You must recognise such supplies and ensure the tax calculation are accurate as prescribed by the law and regulation. Here is why ERP or accounting software plays a key role.

TallyPrime is a complete business management software that fully supports Oman requirements. Using TallyPrime, you can record different types of supplies, generate accurate tax invoices, file precise VAT returns and, many more capabilities to manage VAT with ease.

Read more on Oman VAT:

Oman VATVAT Invoice in OmanBest VAT Software in OmanInput VAT Deduction in Oman,  Reverse Charge Mechanism in Oman VATWhat is VAT and How does it work,

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VAT Registration

VAT Registration Guide in Oman, Who Should Register Under Oman VATBusiness Benefits of Voluntary VAT Registration

VAT Return

VAT Return in OmanOman VAT Return FormatFAQs on Oman VAT ReturnHow to File Oman VAT Return


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