Quick Summary
The Central Board of Indirect Taxes and Customs (CBIC) has notified a major change in the valuation mechanism under GST for specified tobacco-related products, including pan masala and cigarettes. Through Notification No. 19/2025 - Central Tax and Notification No. 20/2025 - Central Tax, both dated December 31, 2025, the government has introduced retail sale price (RSP)-based valuation for certain goods, effective from February 1, 2026. Under the amended notification, the value of supply for p
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FAQ :
The new rules will be effective from February 1, 2026.
The change affects pan masala, unmanufactured tobacco, cigarettes, cigars, other manufactured tobacco products (excluding bidis), and new-age tobacco or nicotine products for inhalation.
GST will be calculated based on the declared Retail Sale Price (RSP) minus the applicable GST.
If multiple RSPs are declared on a package, the highest RSP will be used for GST valuation.
The main objectives are to plug revenue leakages, simplify valuation disputes, strengthen compliance, and improve revenue certainty in the tobacco products sector.
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