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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:

For goods listed in Rule 31D, such as pan masala and cigarettes, the value of supply is the declared retail sale price minus the applicable tax, because the retail sale price already includes taxes, duties and cess.

  1. AThe transaction value between supplier and recipient, excluding tax
  2. BThe retail sale price declared on the goods, less the amount of applicable taxCorrect
  3. CThe retail sale price declared on the goods, including all taxes and cess
  4. DThe cost of production plus 10% of that cost

Explanation

Rule 31D says the value of the specified goods is deemed to be the retail sale price declared on them, less the amount of tax as applicable. Hence the retail sale price is not used as it stands (it includes taxes), and transaction value is overridden by the rule's non-obstante clause.

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