Markup and Margin Calculator (India)

Packaged goods carry a legal price ceiling. Under the Legal Metrology (Packaged Commodities) Rules, 2011, every package must declare its retail sale price, which is the maximum price inclusive of all taxes, in a form such as "MRP Rs. xx.xx (inclusive of all taxes)" (rule 6(1)(e), in this wording since 1 January 2018). Rule 18(2) bars any retailer, wholesaler, packer or importer from selling a packed commodity above that price, and rule 18(5) bars anyone from obliterating or altering it. A new sticker is allowed only to reduce the MRP, and it must not cover the original (rule 6(3)). The retailer's margin therefore sits under the printed MRP, not on top of it, and GST is already inside it. Where the Government fixes the price of an essential commodity under the Essential Commodities Act, 1955, that price applies.

Medicines are price controlled. Under the Drugs (Prices Control) Order, 2013, the National Pharmaceutical Pricing Authority notifies ceiling prices for scheduled formulations, and the MRP may not exceed the ceiling price plus local taxes (paragraph 24). The label must read "Maximum Retail Price" with "inclusive of all taxes", and retailers must display the manufacturer's price list on a conspicuous part of the premises. No one may sell a formulation above the lower of the current price list and the label price (paragraph 26), and loose quantities may not exceed the pro-rata price (paragraph 27). Ceiling prices change by notification, so check the NPPA list before pricing.

A seller must also give the buyer a bill. Under section 2(47)(vii) of the Consumer Protection Act, 2019, not issuing a bill, cash memo or receipt in the prescribed manner is an unfair trade practice. An advertisement that mentions a retail sale price must also state the net quantity (rule 31 of the Packaged Commodities Rules).