GSTN Advisory: Understanding RSP-Based Valuation Under GST

Recently, the government released two notifications (Nos. 19/2025-Central Tax and 20/2025-Central Tax dated 31.12.2025), prescribing the RSP-Based Valuation for Certain Tobacco Products. Following these notifications, the GSTN had issued an advisory on the reporting of taxable value and tax liability under RSP-based valuation for notified tobacco goods. But what exactly is this valuation method?

Under the GST Law, the RSP (Retail Sale Price)-based valuation is a method where the GST for certain specified goods is determined based on the Retail Sale Price printed on the paper rather than the actual transaction value. In other words, the tax amount is not calculated on the invoice value but on the RSP (tax-inclusive). This valuation is mandated under Section 15(4) of the CGST Act, read with relevant notifications.

Why Was the Advisory Issued?

The key objective of the advisory is to:

• Provide clarity on how the supplies should be reported in e-invoice, e-Way Bill, and GST Returns.
• Avoid the discrepancies between tax liability and the reported amount.
• Avoid the chance of getting notices from the GST Department due to incorrect reporting.
• Align E-Way Bill, e-invoice, and GST returns with RSP-based valuation rules.

Reporting Taxable Value

The GSTN in the Advisory provided clarity on the rules regarding the reporting of taxable value. For the notified tobacco goods under the RSP-based valuation, the taxable value is required to be calculated on the RSP basis (after abatement).

Therefore, the actual transaction or the invoice value should not be treated as taxable value. This applies uniformly across the e-Way Bill, e-invoice, GSTR-1/GSTR-1A, and Invoice Furnishing Facility (IFF).

Reporting Taxable Value in E-Way Bill

For generating the E-Way Bill, the reported taxable value must be the same as the RSP-based valuation. The auto-filled value from the invoice should not be altered incorrectly. If there is any mismatch between the e-invoice and the e-way bill, the same will attract system-based alerts.

Reporting Taxable Value in E-Invoice

While generating an e-invoice for the notified tobacco goods, the taxable value must show the RSP minus the notified abatement, resulting in the assessable value. The advisory clearly stated that the GST rate and tax amount should strictly be calculated on this RSP-based taxable value.

There may be difference between the invoice value and the taxable value, which is acceptable under the law.

Reporting Taxable Value in GSTR-1 / GSTR-1A / IFF

In the GST returns, the table-wise reporting must show the RSP-based taxable value and correct tax liability to ensure correct reflection in the recipient’s GSTR-2B and that there is no mismatch between the tax paid and the outward supplier’s report. The IFF filers are also required to follow this valuation method.

What Should Taxpayers Do?

• Check your ERP software settings.
• Check whether the RSP-based calculation is correct.
• Make sure your accounting and compliance teams are well-trained on the new requirements.
• Cross-check taxable value across e-Invoice, e-Way Bill, and GSTR-1 / IFF

Refer to the official GSTN advisory for detailed information.