Enter your cost, the GST rate and the margin you want, and this gives you the MRP to print. Or go the other way: start from an MRP your distributor set and see what margin is actually left. GST is handled separately throughout, because tax you collect is not income.
Buy at ₹100, sell at ₹150. The markup is 50% — the increase over cost. The margin is 33.3% — the profit as a share of the selling price.
Both describe the same trade, but confusing them is how a business that thinks it runs on 40% margins discovers it runs on 28%. Retail and distribution usually talk in margin; manufacturing usually talks in markup. This calculator shows both so there is no ambiguity about which one you just quoted.
Under the Legal Metrology rules, a printed MRP is the maximum retail price including all taxes. You cannot print an MRP and then add GST on top at the counter.
So pricing runs backwards: decide the MRP, strip the GST out of it to get the taxable value, and check that what remains covers your cost and your margin. If it does not, the MRP is wrong — not the tax.
Pricing against a shelf price is a common starting point, and the arithmetic has to run in the right order. Take their MRP, remove the GST at your rate, and you have the taxable value you would have to match. Subtract your landed cost — purchase price after input credit, plus freight — and what is left is the margin the market is offering you at that price.
If that number is thin, the answer is rarely a lower MRP. It is a better buying price, a smaller pack, or a different product.
The GST you collect belongs to the government and passes through you. A shop that treats a ₹1,180 sale as ₹1,180 of revenue is overstating its takings by ₹180 and will find the gap at the end of the month, when the return is due.
The figure to watch is the taxable value. That is your actual turnover, the base for your margin, and the number your accountant means when they ask what you sold.
Remove the GST from the MRP to get the taxable value, subtract your cost, and divide the result by the taxable value. That share is your margin.
No. MRP is the maximum retail price including every tax, and charging above it is an offence under the Legal Metrology rules.
Not if you are registered and can claim the input credit — in that case the GST on your purchase is recoverable, so your real cost is the price before tax.
It varies enormously: a few percent on high-volume staples like edible oil, and thirty to fifty on apparel and accessories. The useful comparison is against your own category, not a general figure.