The Short Answer
Yes, a business can choose either method for display, but the tax invoice must explicitly show the tax amount.
However, for B2C (Retail) businesses, it is mandatory to display the Maximum Retail Price (MRP) inclusive of all taxes. For B2B businesses, quoting usually happens with "Exclusive of GST" rates.
Tax Exclusive Pricing
In this method, you list the product price without tax. When the invoice is generated, the relevant GST (5%, 12%, 18%, 28%) is added to the total.
Common In: B2B Wholesale, Manufacturing, Services (Freelancers, Agencies).
Example:
- Item Price: ₹1,000
- GST (18%): ₹180
- Total Payable: ₹1,180
Tax Inclusive Pricing
Here, the price you see is the price you pay. The business calculates the tax "backwards" from the total amount to separate the base price and the tax component for filing.
Common In: B2C Retail, Restaurants, E-commerce, FMCG.
Example:
- Total Payable: ₹1,180
- Calculated Base Price: ₹1,000
- Calculated GST: ₹180
GST Rules for Displaying Prices
Under the Legal Metrology Act and GST rules in India:
- Retail (B2C): You must display the MRP, which is always Inclusive of all taxes. You cannot charge more than the MRP.
- Wholesale (B2B): It is standard practice to quote prices Exclusive of Tax because the buyer (another business) will likely claim Input Tax Credit (ITC).
Which One Should You Choose?
Choose Inclusive If...
- You run a retail shop, restaurant, or café.
- You want to simplify the checkout experience for regular customers ("What you see is what you pay").
- You adhere to MRP rules for packaged goods.
Choose Exclusive If...
- You deal primarily with other businesses (B2B).
- Your prices fluctuate often based on raw material costs.
- You offer customized services where GST rates might vary.
How Wiseventory Helps
Whether you sell wholesale or retail, your billing software must handle calculations correctly. Wiseventory allows you to toggle between "Tax Inclusive" and "Tax Exclusive" modes for every product or global setting.
When you select "Tax Inclusive", Wiseventory automatically back-calculates the base amount and tax for your GSTR reports, ensuring compliance without the headache of manual math.