Notification / Circular No. : Notification (4-F/2025 No. FD 05 CSL 2025 dated January 27, 2026
Applicable Act / Rule : Karnataka Goods and Services Tax Act, 2017 (Karnataka Act 27 of 2017)
Applicable Section / Rule :Section 164
Effective Date : February 01, 2026
The Karnataka Goods and Services Tax Rules, 2017 provide the framework for valuation of supply and input tax credit restrictions under the State GST regime. On the recommendations of the GST Council, the Government of Karnataka has notified amendments to introduce a specific valuation mechanism for certain goods based on retail sale price. A consequential amendment has also been made to rule 86B.
Insertion of rule 31D
After rule 31C, the following rule is inserted:
“31D. Value of supply of goods on basis of retail sale price.-
(1) … the value of supply of goods … shall be deemed to be the retail sale price declared on such goods, less the amount of tax as applicable.”
The rule applies to specified goods including pan masala and tobacco and tobacco-related products listed in the Table under rule 31D.
The tax amount shall be calculated as:
Tax amount = (Retail sale price × applicable tax rate) / (100 + sum of applicable tax rate).
Amendment of rule 86B
In rule 86B, in the first proviso, after clause (e), the following clause is inserted:
“(f) the registered person other than a manufacturer shall be exempted only in respect of goods specified under rule 31D, on which the tax has been paid by the supplier on the basis of retail sale price.”
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