GSTN Releases Advisory on RSP-Based Valuation of Notified Tobacco Goods under GST
GSTN Releases Advisory on RSP-Based Valuation of Notified Tobacco Goods under GST
The Goods and Services Tax Network (GSTN) has released an important advisory regarding the RSP-based valuation of the notified tobacco goods under GST in Invoice, e-way bill, and GSTR-1, GSTR-1A and the IFF. The new rules are applicable from 1st February, 2026, as per Notification Nos. 19/2025-Central Tax and 20/2025-Central Tax. These two notifications prescribe the RSP-Based valuation for certain tobacco products. Let us understand the key highlights of the advisory.
What is RSP-Based Valuation?
The RSP (Retail Sale Price) based valuation under GST is a method where the tax for the specified goods is calculated based on the maximum Retail Sale Price printed on the package instead of the actual transaction value.
Now, with this valuation method, the GST is no longer required to be calculated based on the actual sale price between the supplier and the recipient.
Calculation of GST under RSP-Based Valuation
Here is how the tax will be calculated:
- Tax Amount: (RSP × GST Rate in % of applicable taxes) / (100 + Sum of applicable tax rates).
- Deemed Taxable Value: RSP – Tax Amount
Products Covered
The advisory is applicable to products such as pan masala, unmanufactured tobacco, cigarettes, cigars, chewing tobacco, etc, falling under notified HSN codes like 2106, 2401, 2402, 2403, and 2404.
Reporting Mechanism
- Taxpayers must enter the Net Sale Value in the taxable value field.
- The GST amount is strictly required to be calculated as per the RSP-based valuation formula.
- The total invoice value should be shown as the net sale value plus the GST amount.
- These values are required to be calculated and entered manually by the taxpayers. The taxpayers have been advised to carefully check the figures before submitting the tax return.
For More Information, Refer to the Official Advisory