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GOVERNMENT OF KARNATAKA

No. FD 05 CSL 2025

Karnataka Government Secretariat

Vidhana Soudha,

Bengaluru, Dated: 27.01.2026

NOTIFICATION (4-F/2025)

In exercise of the powers conferred by section 164 of the Karnataka Goods and

Services Tax Act, 2017 (Karnataka Act 27 of 2017), the Government of Karnataka, on

the recommendations of the Council, hereby makes the following rules further to

amend the Karnataka Goods and Services Tax Rules, 2017, namely:-

1. Short title and commencement. - (1) These rules may be called the

Karnataka Goods and Services Tax ( Amendment) Rules, 2026.

(2) They shall come into force from 1st day of February, 2026.

2. Insertion of new rule 31D.- In the Karnataka Goods and Services Tax Rules,

2017 (hereinafter referred to as the said rules), after rule 31C, the following rule shall

be inserted, namely:-

"31D. Value of supply of goods on basis of retail sale price.- (1) Notwithstanding

anything contained in the provisions of this Chapter, the value of supply of goods

bearing the description specified in column (3), falling under the corresponding

Chapter/heading/sub-heading/tariff item specified in column (2), of the Table

below, shall be deemed to be the retail sale price declared on such goods, less the

amount of tax as applicable, namely: -

¨sÁUÀ – 4ಎ

Part – IVA

, 27

, 2026

, 07

)

BENGALURU, TUESDAY, 27, JANUARY, 2026 ( MAGHA , 07, SHAKAVARSHA, 1947)

. 101

No. 101

2

Table

SL.

No.

Chapter /

Heading /

Sub-heading /

Tariff item

Description of Goods

(1)

(2)

(3)

1.

2106 90 20

Pan masala

2.

2401

Unmanufactured tobacco; tobacco refuse

[other than tobacco leaves]

3.

2402

Cigars, cheroots, cigarillos and cigarettes, of

tobacco or of tobacco substitutes

4.

2403

Other manufactured tobacco and manufactured

tobacco

substitutes;

“homogenised”

or

“reconstituted” tobacco; tobacco extracts and

essences (other than biris)

5.

2404 11 00

Products containing tobacco or reconstituted

tobacco and intended for inhalation without

combustion

6.

2404 19 00

Products containing tobacco or nicotine

substitutes and intended for inhalation without

combustion

(2) The amount of applicable tax referred to in sub-rule (1) shall be determined

in the following manner, namely:-

Tax amount = (Retail sale price X tax rate in % of applicable taxes) / (100+ sum

of applicable tax rate).

Explanation.- For the purposes of this rule,-

(a) “applicable tax” means IGST or CGST or SGST or UTGST as the case may

be;

(b) "retail sale price" means the maximum price declared on goods at which

such goods in packaged form may be sold to the ultimate consumer and

includes all taxes, duties, surcharge or cess by whatever name called;

(c) where on the package of any specified goods more than one retail sale price

is declared, the maximum of such retail sale price shall be deemed to be

the retail sale price;

3

(d) where the retail sale price declared on packages of any specified goods is

altered to increase the retail sale price at any stage before, during, or after

the supply, such altered retail sale price shall be deemed to be the retail

sale price; and

(e) where different retail sale prices are declared on different packages for the

sale of any specified goods above in packaged form in different areas, each

such retail sale price shall be the retail sale price for the purposes of

valuation of the specified goods intended to be sold in the area to which the

retail sale price relates."

3. Amendment of rule 86B.- In the said rules, in rule 86B, in the first proviso,

after clause (e), the following clause shall be inserted, namely:-

"(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:".

By Order and in the name of the

Governor of Karnataka,

(H. R. LALITHA)

Under Secretary to Government,

Finance Department (Exp-2 & 10)

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Date: 2026.01.27 17:39:52 +05'30'