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

Under Rule 31D of the CGST Rules, 2017 (as inserted w.e.f. 1 February 2026), the value of supply of specified goods such as cigarettes is deemed to be the retail sale price declared on the goods:

The value is the declared retail sale price minus the applicable tax. Since the retail sale price already includes all taxes, duties, surcharge and cess, Rule 31D deems the value to be the tax-exclusive amount and overrides the normal transaction value rules for the specified goods.

  1. Aless the amount of applicable tax, computed from the retail sale priceCorrect
  2. Bplus the applicable tax, added to the retail sale price
  3. Cinclusive of all taxes, with no deduction
  4. Dequal to the transaction value agreed between supplier and recipient

Explanation

Rule 31D(1) deems the value to be the declared retail sale price less the amount of tax as applicable. The retail sale price already includes all taxes, duties, surcharge or cess, so tax is backed out rather than added. Option C ignores the deduction and option D ignores the deeming rule.

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