Short answer: No, a shop in India cannot sell a packaged product above its MRP. MRP already includes GST and every other tax, so you can sell at MRP or give a discount, but you cannot add anything on top. Doing so is an offence under the Legal Metrology Act, 2009.
This guide covers what MRP includes, the common ways shops end up over MRP without meaning to, how GST works when you sell below MRP, and what the penalty is.
What MRP means on a packaged product
MRP (maximum retail price) is the highest price a packaged product can be sold for to a consumer. It is printed on the pack by the manufacturer, packer or importer under the Legal Metrology (Packaged Commodities) Rules, 2011, along with details such as:
- name and address of the manufacturer, packer or importer
- common name of the product and net quantity
- month and year of manufacture (and best before or use by date where required)
- retail sale price, written as MRP ₹___ inclusive of all taxes
- consumer care contact details
The words "inclusive of all taxes" matter. The GST is already inside that number.
Four ways shops cross MRP by mistake
- Adding GST on top. A bill that shows MRP ₹100 plus 18% GST = ₹118 is wrong. The customer pays ₹100 at most.
- Cooling or chilling charge. A ₹20 cold drink sold at ₹22 because it came from the fridge is over MRP.
- Old price list after an MRP drop. When a company cuts the MRP on new stock, an old rate in your billing system can charge above the new printed price.
- Re-stickering. Covering the printed MRP with a higher price sticker is not allowed. Only the packer can declare a revised MRP, and only as the rules permit.
How GST works when you sell at or below MRP
Because MRP includes GST, the tax is worked backwards from the price you charge. The formula is taxable value = selling price × 100 / (100 + GST rate). For the full method, see our guide to the reverse GST calculation formula.
| Sale | Price charged | Taxable value | GST at 18% |
|---|---|---|---|
| At MRP | ₹100.00 | ₹84.75 | ₹15.25 |
| 10% discount | ₹90.00 | ₹76.27 | ₹13.73 |
A discount shown on the invoice lowers the taxable value. For how to show discounts on a GST bill, read GST on discounts in a retail invoice.
What about loose goods?
Items you weigh and sell loose at the counter, such as rice, dal or sugar from a sack, do not carry a printed MRP. Your price is your own, but the weighing scale must be verified and stamped by the Legal Metrology department. If you pack loose items into your own pre-packed bags for sale, those packs need the required declarations, including MRP.
Penalty for selling above MRP
Packaged commodity offences under the Legal Metrology Act, 2009 carry a fine of up to ₹25,000 for a first offence, up to ₹50,000 for a second offence, and up to ₹1 lakh, imprisonment up to one year, or both for later offences. Customers can also take an overcharge to the consumer commission. Rules and enforcement are handled by each state's Legal Metrology department, so check with them or your CA for your exact case. For other licences a shop needs, see licences and registrations for a retail shop.
How to stay under MRP every day
- Keep the MRP and your selling price for each item in your billing software's item list, and update both when new stock arrives with a different MRP.
- Bill packaged goods by barcode so the counter never types a price by hand. See how to print barcode labels for your own packed items.
- Set GST-inclusive prices for packaged goods so the tax is split inside the price, never added on top.
- Print or WhatsApp a proper bill for every sale, so any customer question can be answered from the record.
Frequently asked questions
- Can a shopkeeper sell above MRP in India?
- No. For packaged goods, MRP is the maximum retail price including all taxes. Charging even ₹1 more over the counter breaks the Legal Metrology rules, whether you call it a cooling charge, a carry bag fee on the product or extra GST.
- Is GST included in MRP?
- Yes. MRP on a packaged product is inclusive of all taxes, including GST. A shop cannot add GST on top of MRP. On your tax invoice, the GST is worked backwards out of the selling price.
- Can I sell below MRP?
- Yes. MRP is a ceiling, not a fixed price. Any discount below MRP is allowed, and GST is then calculated on the discounted price you actually charge.
- What is the penalty for selling above MRP?
- Under the Legal Metrology Act, 2009, the fine for a first offence can go up to ₹25,000, up to ₹50,000 for a second offence, and up to ₹1 lakh, imprisonment up to one year, or both for later offences. The Legal Metrology department of your state enforces it.
- Can a shop charge extra for chilled cold drinks or water?
- No. A shop selling a packed cold drink or water bottle over the counter must not charge more than the printed MRP, even if it is chilled. Hotels and restaurants serving it as part of a meal are treated differently, but a retail counter is not.
- Where can a customer complain about overcharging above MRP?
- Customers can call the National Consumer Helpline on 1915 or complain online through the consumer helpline portal, or approach the state Legal Metrology office. Keeping clean bills that never cross MRP is the simplest protection for a shop.
Bottom line: MRP is a ceiling that already includes GST. Sell at it or below it, never above it. RichPOS keeps item prices, barcodes and GST-inclusive billing in one place for Indian retail shops. Call +91 90333 31255 or start the 30-day free trial from the pricing page.
