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Taxation Central Ministry of Finance Central Goods and Services Tax Act, 2017

CBIC (GST) issues Advisory on RSP-Based Valuation of Notified Tobacco Goods under GST

23-Jan-2026 | NA

CBIC (GST) has issued Advisory on RSP-Based Valuation of Notified Tobacco Goods under GST Key Highlights: 1. Certain tobacco products falling under specific HSN codes (such as pan masala, unmanufactured tobacco, cigarettes, cigars, and other manufactured tobacco substitutes) are covered under this system. For these notified goods, GST is calculated based on the Retail Sale Price (RSP) printed on the package, not on the actual sale price or discounts given. 2. The actual transaction value between buyer and seller is irrelevant for GST calculation once RSP-based valuation applies. The tax amount is calculated using a prescribed RSP formula, where tax is extracted from the RSP (which is tax-inclusive). 3. The deemed taxable value is arrived at by deducting the GST amount from the total RSP. Even if goods are sold at a lower commercial price (due to discounts or negotiations), GST liability remains linked to the RSP only. The final invoice reflects the commercial consideration plus statutory GST, but the tax computation is strictly driven by the RSP. 4. Taxpayers are required to report the Net Sale Value in the taxable value field. The tax amount shall be reported in accordance with the RSP-based valuation formula, and the total invoice value shall be reported as the sum of the Net Sale Value and the tax amount. For more information, please refer to the attached document.

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