Advisory on RSP-Based Valuation of Notified Tobacco Goods under GST
GST
Dated:- 23-1-2026
An advisory on reporting of taxable value and tax liability under RSP-based valuation in e-Invoice, e-Way Bill and GSTR-1 / GSTR-1A / IFF has been issued for the information and guidance of taxpayers. The advisory may be accessed through the link provided below.
Advisory on RSP-Based Valuation of Notified Tobacco Goods under GST
1. Background:
Vide Notification Nos. 19/2025-Central Tax and 20/2025-Central Tax, both dated 31.12.2025, Retail Sale Price (RSP)-based valuation for specified tobacco and tobacco-related products, has been prescribed with effect from 01.02.2026.
The said notifications cover the following HSN codes and descriptions:
S. No.
Chapter / Heading / Sub-heading
Description of Goods
1
2106 90 20
Pan masala
2
2401
Unmanufactured tobacco; tobacco refuse (other than tobacco leaves)
3
2402
Cigars, cheroots, cigarillos and cigarettes, of tobacco or of
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licable taxes) / (100 + Sum of applicable tax rate)
* Deemed Taxable Value = RSP − Tax Amount
Thus, GST liability is determined with reference to RSP, irrespective of the actual sale price.
2.2. For ease of reference, an illustrative tax invoice is provided below.
A. The item particulars are as follows (RSP-based notified goods)
Field
Value
Relevant HSN (RSP-based notified goods)
2403
MRP / RSP per pack (Rs.)
100
Total packs
1,000
Total RSP (Rs.)
1,00,000
B. Statutory computation as per RSP formula (IGST @ 40%)
Under RSP-based valuation, the deemed taxable value and tax amount are required to be derived from the RSP (tax-inclusive).
Particulars
Computation
Amount (Rs.)
Total RSP (aggregate)
100 x 1,000
1,00,000.00
Tax amount (IGST @ 40%)
(1,00,000 x 40) / (100 + 40)
28,571.43
Deemed taxable value (as per RSP formula)
Total RSP − Tax amount
71,428.57
C. Commercial transaction values (actual consideration)
Particulars
Amo
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ng that “the sum of taxable value and tax amount cannot be greater than the total invoice value.”
However, in the illustrated case of RSP-based valuation above, the taxable value works out to Rs.71,428.57 and the tax amount to Rs.28,571.43, while the commercial transaction value (net sale value) is Rs.60,000, the total invoice value, computed as net sale value plus tax, would be Rs.88,571.43. In such cases, reporting the deemed taxable value derived from RSP would result in the sum of taxable value and tax amount exceeding the total invoice value.
4.Reporting Guidance for RSP-based Valuation Goods
4.1. In view of the above, for supplies covered under RSP-based valuation, taxpayers are advised to report invoice details in the following manner in EWB and E-invoice systems:
a) The Net Sale Value (i.e., the actual transaction value / commercial consideration) shall be reported in the taxable value field. Accordingly, Rs.60,000.00 shall be reported as the taxable value, as illustrat
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ula, as prescribed under the law. Accordingly, as shown in the illustration above, a tax amount of Rs.28,571.43 shall be reported in the tax amount field, which is derived based on the deemed taxable value of Rs.71,428.57 computed as per the RSP-based formula. However, in case, the GSTR-1 reflects the system calculated tax amount that is different from the tax amount leviable, the same may be edited to report the correct tax amount leviable under RSP- based valuation in accordance with the notification i.e., as illustrated above, a tax amount of Rs.28,571.43 .
c) The total invoice value shall be reported as the sum of the Net Sale Value and the tax amount. Accordingly, the total invoice value shall be Rs.88,571.43 (Rs.60,000.00 + Rs.28,571.43).
5. Reporting Mechanism
In order to facilitate seamless generation of e-Invoice, e-Way Bill and GSTR-1/1A/IFF for RSP-based supplies, it has been decided that:
a) Taxpayers are required to report the Net Sale Value in the taxable value field
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