The Central Government has issued Notification No. 20/2025–Central Tax, dated 31st December 2025, to amend the Central Goods and Services Tax Rules, 2017, introducing provisions for valuation of supply of specified goods on the basis of declared Retail Sale Price (RSP). The notification has been issued by the Ministry of Finance, Department of Revenue, through the Central Board of Indirect Taxes and Customs (CBIC) and published in the Gazette of India (Extraordinary) vide G.S.R. 950(E).
The notification notifies the Central Goods and Services Tax (Fifth Amendment) Rules, 2025, which insert a new Rule 31D in the CGST Rules, 2017. The newly inserted rule provides that, notwithstanding any other provisions, the value of supply of notified goods shall be deemed to be the retail sale price declared on such goods, reduced by the amount of applicable tax.
The specified goods covered under Rule 31D include pan masala, unmanufactured tobacco (other than tobacco leaves), cigars, cheroots, cigarillos and cigarettes, other manufactured tobacco and tobacco substitutes, and products containing tobacco or nicotine substitutes intended for inhalation without combustion. These goods fall under tariff headings 2106, 2401, 2402, 2403 and 2404 of the Customs Tariff Act, 1975.
The notification clearly defines retail sale price as the maximum price declared on the package, inclusive of all taxes, duties, cess or surcharges. Where multiple retail sale prices are declared, the highest price shall be treated as the retail sale price. Any increase in the declared retail sale price at any stage before, during or after supply shall also be considered for valuation purposes. Separate retail sale prices declared for different areas shall apply to valuation in the respective areas.
The amendment further provides relief under Rule 86B, exempting registered persons other than manufacturers from certain restrictions in respect of goods covered under Rule 31D, where tax has already been paid by the supplier on the basis of retail sale price.
The provisions of Notification No. 20/2025–Central Tax shall come into force with effect from 1st February 2026, ensuring clarity, uniformity and certainty in GST valuation for the specified goods.
The Notification can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2025/12/Notification-No-20-of-2025-of-Central-Tax.pdf
