GSTN Advisory dated 23rd January 2026: RSP-Based Valuation of Notified Tobacco Goods under GST

Posted On - 28 February, 2026 • By - King Stubb & Kasiva

An advisory has been issued on the reporting of taxable value and tax liability under RSP-based valuation in e-Invoice, e-Way Bill and GSTR-1 / GSTR-1A / IFF. Vide Notification Nos. 19/2025–Central Tax and 20/2025–Central Tax, both dated 31.12.2025, wherein Retail Sale Price (RSP)-based valuation for specified tobacco and tobacco-related products has been prescribed with effect from 01.02.2026. In terms of the aforesaid notifications, the value of the specified goods is to be determined with reference to the declared Retail Sale Price (RSP). Consequently, for GST purposes, the assessable value is not dependent upon the actual transaction price agreed between the supplier and the recipient but is computed based on the RSP displayed on the packaging, regardless of the underlying commercial consideration.

For goods notified under RSP-based valuation, tax is required to be computed using the following formula:

Tax Amount = (RSP × GST Rate in % of applicable 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. To ensure seamless generation of e-Invoices, e-Way Bills, and GSTR-1/1A/IFF in respect of supplies valued on the basis of RSP:

  1. Taxpayers shall disclose the Net Sale Value in the “taxable value” field. The corresponding tax liability must be computed in accordance with the RSP-based valuation mechanism, and the total invoice value shall reflect the aggregate of the Net Sale Value and the applicable tax amount.
    All three components are to be self-determined and accurately reported by the taxpayer, with due verification undertaken prior to filing. Wherever the system auto-populates or computes values, the taxpayer shall suitably modify such figures, where necessary, to align with the RSP-based valuation method.
  2. The aforesaid reporting framework is applicable exclusively to the HSN codes notified under the aforementioned notifications. This mechanism has been introduced purely as a trade facilitation measure and does not in any manner override, relax, or amend the substantive provisions or statutory obligations prescribed under the GST law.