GSTLegal Advice

How GST is Calculated in MRP with Example?

Know in detail about how GST works in MRP with proper examples here and get a good understanding of the same.

The goal of “One Nation, One Tax” was finally reached on July 1, 2017, when GST calculator, a tax that had been talked about for a long time, went into effect. Because of this, the whole tax system for goods and services had to be changed. GST is the name of the tax that comprises all indirect taxes. Goods and Services Tax, to be exact. But there are still a lot of traders and manufacturers who aren’t sure if the GST on MRP products is fair. People don’t know if MRP products should be charged GST or not.

So, it’s essential to understand what MRP means and how GST affects different products. Through this blog, we’ve tried to explain everything about MRP so that the next time you buy or sell something, you won’t have to wonder if GST is included in MRP or not. So, let’s start with what MRP stands for and what it means.

What Does MRP Stand for?

Maximum Retail Price, or MRP, is written on every product. As the name suggests, the maximum retail price is the highest price a company can charge for a product to be sold in India. According to the Consumer Goods Act of 2006, a seller or retailer can’t set more than the MRP listed on the product’s packaging.

After the GST was implemented, the actual prices of several goods and services changed from what they were before. In addition to changing the GST rates, the government also changed the rules for manufacturers and retailers about the MRP.

MRP Rules After GST Rate Changes and the Start of GST

Whenever the GST rate changes, the MRP on every item that hasn’t been sold should be updated as of the day that the new rate was put in place or changed. In this case, retailers or manufacturers need to put the new MRP on their products by stamping, sticking on stickers, or printing them online. Also, one must meet the following requirements:

  • The original MRP should be transparently written on the item. Also, the changed MRP can’t replace the actual MRP.
  • According to Section 140 (3) of the CGST Act, 2017, the difference between the original MRP and the revised MRP can’t be more than the net price increase after taking into account the excess availability of ITC and the tax incidence. Also, it’s important to remember that he thought traders could get credit.
  • Anyone who wants to change the MRP must put up two ads in at least one newspaper. They must also send the same information to the Director of Legal Metrology and the Controllers of Legal Metrology in each state.
  • Manufacturers don’t have to tell the newspaper if the GST rate goes down after GST is put into place.

No matter what happens, the manufacturer must put a sticker on the product with the new MRP and the old one.

Putting a price on GST on products with MRP

Avinash K. Srivastava, Secretary of the Department of Consumer Affairs, answered questions about the MRP of goods under the GST. He made it clear that every manufacturer and distributor must print on the product the full details of both the revised MRP and the original MRP. He also said that if the price increases, another notice will be sent out, and both prices will be written on the product packaging.

Aside from this, dealers who are part of the GST Composition Scheme don’t have to show tax, while other vendors who are part of the scheme should show how the costs are split. Since there isn’t yet a cess on goods, vehicles crossing state borders will still have to pay unless they have a national licence. Twenty-two states have shut down checkpoints so far. The car cost is on the edges of intersections, not the goods being moved. So, that ought to be paid.

After GST was implemented, a Central Monitoring Committee was set up to look at the pricing and supply of goods. At a press conference in Delhi, the Revenue Secretary, Dr. Hasmukh Adhia, said the following: “A committee of 15 secretaries from departments that deal directly with consumers has been set up to keep an eye on commodity prices and client groups.” Even though there is no field work, officials will have to keep an eye on four to five districts with the help of the Link officer.

The GST is charged based on the transaction value, the actual price paid for a good or service. Under GST, the value of a supply includes all duties, cess, fees, and other costs imposed by any act.

MRP calculation

Follow the formula below to find out or figure out the Maximum Retail Price of any product:


MRP calculation formula:

Maximum Retail Price = Manufacturing Cost + CnF Margin + Packaging/Presentation Cost + Stockist Margin + Profit Margin + Stockist Margin +  GST + Shipping + Retailer Margin + Marketing/Advertising Costs + Other Costs.

  1. Objections to the seller if he sells items for more than the MRP
  2. Central Board of Excise and Customs (CBEC) rules say that if a store charges GST on top of the MRP, customers can file a complaint against the store. People can file complaints with the ministry or one of India’s anti-profiteering commissions.
  3. Since the MRP includes all taxes, stores can’t charge more than the price that’s written on the product. Sellers and manufacturers can only sell items for less than the MRP. Also, they can give discounts on the MSRP for some things.
  4. So, if a retailer has added GST or any other tax to the MRP after a discount or without a deal, you as a customer, need to speak up.
  5. Getting in trouble for putting GST on MRP products
  6. If shop owners sell items for more than the maximum retail price, they would have to pay a fine of Rs. 1 lakh or go to jail for a year.


So, the maximum retail price (MRP) of a product is the highest price that the company making the product can calculate and charge for it to be sold in India. Retailers can sell the items for less than the MRP but can’t sell them for more than the MRP. If a store charges GST on the MRP, customers can file a complaint against him. Also, if the seller were found guilty, they would face the harsh punishments listed above.Leave a comment below if you have any questions about the GST on MRP products. Our expert at Vakilsearch will answer you more quickly.

Also, Read:


Back to top button


Remove Adblocker Extension