GSTN Advisory On RSP Based Valuation Of Tobacco Goods

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  • Last Updated on 27 January, 2026

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RSP Based Valuation Of Tobacco Goods Under GST

GSTN Advisory, Dated 23-01-2026

1. Introduction: GSTN Issues Advisory on RSP-Based Valuation

The Goods and Services Tax Network (GSTN) has issued an advisory dated 23 January 2026 to guide taxpayers on reporting taxable value and tax liability for notified tobacco and tobacco-related goods under GST. The advisory applies with effect from 1 February 2026 and addresses compliance aspects of Retail Sale Price (RSP)-based valuation.

2. Legal Framework Governing RSP-Based Valuation

The advisory refers to Notification No. 19/2025–Central Tax and Notification No. 20/2025–Central Tax, both dated 31 December 2025. Under these notifications, GST on specified tobacco products is required to be computed on the basis of the RSP declared on the package, irrespective of the actual transaction value agreed between the supplier and the recipient.

3. Computation of Deemed Taxable Value

GSTN has clarified the statutory mechanism for deriving the deemed taxable value and corresponding tax amount from the declared RSP. Even where the commercial consideration differs from the deemed value, taxpayers are required to strictly apply the prescribed RSP-based valuation formula for computing GST liability on the notified goods.

4. Reporting in e-Invoice, e-Way Bill and GST Returns

For reporting purposes in e-Invoice, e-Way Bill, and GSTR-1, GSTR-1A, or IFF, taxpayers must disclose the net sale value, being the commercial consideration, in the taxable value field. However, tax must be calculated strictly as per the RSP-based valuation. The total invoice value should be reported as the aggregate of the net sale value and the tax so computed, even where the deemed taxable value does not align with the transaction value.

5. Conclusion: Compliance Responsibility on Taxpayers

The advisory makes it clear that this reporting mechanism is applicable only to the notified HSNs and places the responsibility of correct self-assessment on taxpayers. Proper identification and classification of goods, accurate computation of tax based on RSP, and verification of reported figures are essential to ensure compliance and avoid disputes under GST.

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied