What is MRP (Maximum Retail Price)?
MRP is the retail price printed on a product's pack by the manufacturer, which is the most a shop is expected to charge the customer.
Updated
Meaning
English
MRP is the retail price printed on a product's pack by the manufacturer, which is the most a shop is expected to charge the customer.
Roman Urdu
MRP woh retail qeemat hai jo company pack par chhapti hai; dukaan gahak se is se zyada nahi le sakti.
Also called maximum retail price, printed price, retail price, company rate.
Example
A juice pack shows "Retail price 120 rupees". The shop buys it at trade price and sells at the printed price; its margin is the difference, set by the company rather than the shop.
How it works
In Pakistan many packaged goods, including drinks, cooking oil, toiletries and medicines, carry a printed retail price. For these, the shop does not set the price: its profit is the gap between the trade price from the distributor and the printed price. Charging above the printed price causes complaints and can break consumer and price-control rules. For goods listed in the Third Schedule of the Sales Tax Act, 1990, sales tax is charged on the printed retail price.
When a company raises its price, old stock still carries the old printed price. Shops should update the selling price only when new stock arrives, which is easier when purchases are recorded by batch.
In Nafaa
Nafaa stores a cost price and a selling price for each product, and the product editor shows margin as prices are typed, so printed-price items can be checked for the margin the distributor actually leaves.
Official source
The Sales Tax Act, 1990 and its schedules are published on FBR: Acts, Rules and Ordinances.
Related terms
- Wholesale Price
A wholesale price is the lower price charged to buyers who purchase in bulk or resell the goods, such as retailers, contractors or institutions.
- Gross Margin
Gross margin is gross profit shown as a percentage of the selling price: (selling price minus cost) divided by selling price.
- Sales Tax (GST)
Sales tax, often called GST in Pakistan, is a tax on the supply of goods charged under the federal Sales Tax Act, 1990, with services taxed separately by the provinces.