A composite supply means a supply of goods and/or services or a combination of both, which is naturally bundled together and supplied with each other one of which is a principal supply. In other words, goods or services in a composite supply cannot be supplied separately. In a composite supply, the tax rate of the principal supply will apply on the whole supply.
For example, in case of transportation of goods, the supply of goods, packing material, insurance form a composite supply and the supply of goods is the principal supply. The packing material or insurance cannot be supplied separately if there is no supply of goods.