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CMA Final · Indirect Tax Laws and Practice · Valuation under GST

A cigarette maker sells the same specified product in State A with packs declaring an RSP of Rs 118 and in State B with packs declaring an RSP of Rs 177, both tax-inclusive. As per Rule 31D, how is the retail sale price determined?

Each declared price applies to the area it relates to. Rule 31D says that where different retail sale prices are declared on packages meant for different areas, each RSP is the retail sale price for goods intended for that area, so no averaging or maximum is used.

  1. AThe higher RSP of Rs 177 applies to supplies in both areas
  2. BThe average RSP of Rs 147.50 applies to all supplies
  3. CEach declared RSP applies to supplies intended for the area to which it relatesCorrect
  4. DRule 31D does not apply and transaction value is used

Explanation

The Explanation provides that where different RSPs are declared on different packages for sale in different areas, each RSP is the retail sale price for goods intended to be sold in the area to which it relates. Hence Rs 118 for State A and Rs 177 for State B; no averaging or maximum across areas applies.

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