CMA Final · Indirect Tax Laws and Practice · Valuation under GST
A pan masala manufacturer prints two retail sale prices on the same package: ₹118 and ₹130. Under the Explanation to Rule 31D, which price is the retail sale price for valuation?
The retail sale price is ₹130. Where more than one retail sale price is declared on a package of specified goods, Rule 31D deems the maximum declared price to be the retail sale price, and the applicable tax is then deducted from it to get the value.
- A₹118, the lower of the two prices
- B₹124, the average of the two prices
- C₹130, the maximum of the prices declaredCorrect
- DWhichever price the supplier chooses at the time of sale
Explanation
Explanation clause (c) provides that where more than one retail sale price is declared on the package of specified goods, the maximum of them is deemed to be the retail sale price. So ₹130 is used, and tax is then deducted from it. Lower or average prices are not recognised.
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