Selling price = cost × (1 + markup %). For clothes, that price before GST decides the rate (₹2,500 or less: 5%, above: 18%), and MRP = selling price + GST. A ₹600 kurta at 100% markup sells for ₹1,200 before GST; with 5% GST the MRP is ₹1,260, or ₹1,299 rounded to …99. Keep clothing MRPs at ₹2,625 or below, or ₹2,951 or above: anywhere in between leaves you less than ₹2,625 does.
MRP includes GST, as on a clothing tag; GST worked out like the Tap & Bill app. A guide, not tax advice.
Print these MRPs on barcode labels
With Stock & barcodes in Tap & Bill (Growth and Pro, and the free trial), add designs with sizes, MRP and cost, print labels and scan to bill; staff never see your cost. Try it free for 14 days, no card.
The formulas
Selling price before GST = cost × (100 + markup) ÷ 100. ₹600 at 100% = ₹1,200.
GST rate for clothes: selling price before GST ₹2,500 or less → 5%; above → 18%.
MRP = selling price × (100 + rate) ÷ 100, then round up to the price ending you like. ₹1,200 × 1.05 = ₹1,260 → ₹1,299.
Profit = MRP without GST − cost. Markup = profit ÷ cost. Margin = profit ÷ price without GST.
Markup or margin?
Markup on cost
Margin on selling price
Example: cost ₹1,000
25%
20%
Sell at ₹1,250 before GST, profit ₹250
50%
33.3%
Sell at ₹1,500 before GST, profit ₹500
100%
50%
Sell at ₹2,000 before GST, profit ₹1,000
150%
60%
Sell at ₹2,500 before GST, profit ₹1,500
200%
66.7%
Sell at ₹3,000 before GST, profit ₹2,000
MRP for common garment costs (100% markup)
Cost
Before GST
GST
MRP (…99)
You keep
Profit
₹250
₹500
5%
₹599
₹570.48
₹320.48
₹450
₹900
5%
₹999
₹951.43
₹501.43
₹600
₹1,200
5%
₹1,299
₹1,237.14
₹637.14
₹900
₹1,800
5%
₹1,899
₹1,808.57
₹908.57
₹1,200
₹2,400
5%
₹2,599
₹2,475.24
₹1,275.24
₹1,250
₹2,500
18% !
₹2,699
₹2,287.29
₹1,037.29
₹1,500
₹3,000
18%
₹3,599
₹3,050.00
₹1,550.00
₹2,000
₹4,000
18%
₹4,799
₹4,066.95
₹2,066.95
! Rounding up crossed ₹2,625, so the rate became 18%. For that piece, an MRP of ₹2,625 leaves you more.
The ₹2,625 line on clothing tags
A piece that cost ₹1,400, at different MRPs. ₹2,625 is the highest 5% tag; from ₹2,626 the app charges 18%, and only at ₹2,950 do you keep ₹2,500 again.
MRP
GST rate
You keep (without GST)
Profit
Margin
₹2,499
5%
₹2,380.00
₹980.00
41.2%
₹2,625
5%
₹2,500.00
₹1,100.00
44%
₹2,699
18% *
₹2,287.29
₹887.29
38.8%
₹2,799
18% *
₹2,372.03
₹972.03
41%
₹2,899
18% *
₹2,456.78
₹1,056.78
43%
₹2,950
18% *
₹2,500.00
₹1,100.00
44%
₹2,999
18%
₹2,541.53
₹1,141.53
44.9%
₹3,199
18%
₹2,711.02
₹1,311.02
48.4%
* Grey zone: the Tap & Bill app charges 18% on GST-included prices from ₹2,626 to ₹2,950. Ask your CA. Details: GST on clothes: 5% or 18%?
Pricing tips for a clothing counter
Work out the MRP with GST, then round. Rounding before GST can push a tag over ₹2,625.
Leave room for bargaining and festive offers. If you give 10% to regulars, price so that 10% off still leaves your margin. Check an offer with the GST after discount checker.
Use your real cost: the purchase price without the GST you claim back, plus freight and alteration you don’t charge for.
Set a lowest price per item in your billing app so staff can’t bargain below your margin without your OK (Mol-Bhav Guard in Tap & Bill).
Frequently asked questions
How do I calculate MRP from cost price?
Add your markup to the cost to get the selling price before GST, then add GST. For clothes the price before GST picks the rate: ₹2,500 or less is 5%, above is 18%. A ₹600 kurta at 100% markup is ₹1,200 before GST, ₹1,260 with 5% GST, and ₹1,299 if you round up to a price ending in 99.
What is the difference between markup and margin?
Markup is profit as a % of your cost; margin is profit as a % of the selling price (without GST). Buy at ₹600 and sell at ₹1,200: markup 100%, margin 50%. Margin = markup ÷ (100 + markup) × 100.
What markup do clothing shops keep?
There is no fixed rule. Many clothing shops price at around double their cost (100% markup), more on fashion pieces that may not sell through, less on basics such as innerwear and school uniforms. Look at what nearby shops charge for the same piece, and keep room for festive discounts and bargaining.
Does MRP include GST?
Yes. The MRP printed on a packaged item is the most you may charge, with all taxes included. That is why the calculator adds GST before it rounds the MRP, and checks the rate again on the final MRP.
Why did the GST on my MRP jump to 18%?
Because the MRP went above ₹2,625. On a clothing tag that includes GST, ₹2,625 is the highest price that is still ₹2,500 without GST (5%). A ₹1,250 piece at 100% markup is ₹2,500 before GST, ₹2,625 with GST; round it up to ₹2,629 and it becomes 18%, so you keep ₹2,227.97 instead of ₹2,500.
Which MRPs should I avoid on clothes?
From ₹2,626 to ₹2,950. In that band you keep the same or less than at ₹2,625, because the rate is 18% (as the Tap & Bill app charges there) and ₹2,950 at 18% is again exactly ₹2,500 without GST. Price a piece at ₹2,625 or below, or ₹2,951 or above.
MRP se margin kaise nikale? (MRP से मार्जिन कैसे निकालें)
MRP में से GST निकालें (5% के लिए MRP ÷ 1.05, 18% के लिए ÷ 1.18), फिर उसमें से लागत घटाएँ: यह मुनाफ़ा है। मुनाफ़ा ÷ बिना GST दाम × 100 = मार्जिन %। ऊपर “लागत + MRP → मेरा मार्जिन” चुनें। हिंदी में पूरा तरीका: MRP कैसे निकालें।
I am not registered for GST. How do I set MRP?
You don’t add GST to your price. Choose “No GST (0%)” under Item: the MRP is your cost plus markup, rounded. The GST you paid your supplier is part of your cost, because you can’t claim it back.