About the Pricing Planner
Margin and markup are not the same number, and GST sits on top of both. Margin is profit as a share of the selling price; markup is profit as a share of cost. A 25 % margin is a 33 % markup. Retailers, manufacturers and service providers routinely quote one and mean the other, and then forget that the shelf price includes GST that is not theirs to keep.
This planner works in both directions. Give it the landed cost, the margin you want and the GST rate, and it returns the price before GST, the markup that implies, the GST amount and the GST-inclusive shelf price. Or give it the shelf price you have to match and it tells you the margin you actually keep after backing out GST.
Use it for price lists, tender quotes and marketplace listings where the platform shows the inclusive price. Cost should be the full landed cost — purchase price, freight, packing and any input tax you cannot claim.
How to use it
- 1Enter the landed cost per unit.
- 2Choose 'plan a price' and enter the margin you want, or 'check a price' and enter the shelf price you must match.
- 3Pick the GST rate for the item.
- 4Read the price before GST, the markup, the GST and the inclusive price — or the margin you keep.
How this is calculated
Price before GST = cost ÷ (1 − margin %) Markup % = (price before GST − cost) ÷ cost GST = price before GST × GST rate; shelf price = price before GST + GST Working back: price before GST = shelf price ÷ (1 + GST rate); margin % = (price before GST − cost) ÷ price before GST
Frequently asked questions
Why is my markup higher than my margin?
Because markup divides profit by the smaller number (cost) and margin divides it by the larger one (price). A ₹25 profit on a ₹75 cost is a 33 % markup and a 25 % margin. Suppliers often quote markup; retailers and lenders usually discuss margin.
Is GST part of my margin?
No. GST collected on a sale is paid to the government (net of input credit). Margin is computed on the price before GST. That is why a shelf price that looks comfortable can leave a thin margin once GST is backed out.
What if I cannot claim input tax credit?
Then the GST you paid on purchases is part of your cost — add it to the landed cost before planning the price. Composition dealers and businesses making exempt supplies are in this position.
How do I handle a marketplace commission?
Treat the commission as a percentage cost of the price: plan the margin you want after commission, or add the commission percentage to your margin target before entering it. A dedicated marketplace fee field is a good next step.