Last updated: 23 October 2026
Every medicine has three prices in the trade. The MRP (maximum retail price) is printed on the pack and includes GST. The PTR (price to retailer) is what the chemist pays the wholesaler or stockist. The PTS (price to stockist) is what the stockist pays the company or its C&F agent (carrying and forwarding agent). PTR and PTS are prices before GST. This calculator works them out from the MRP, with the margins you set.
How are PTR and PTS worked out from MRP?
In three steps, in plain words:
- Take GST out of the MRP. Price without GST = MRP × 100 ÷ (100 + GST rate). For an MRP of ₹120 at 5%: ₹120 × 100 ÷ 105 = ₹114.29.
- Take the retailer's margin off. PTR = price without GST − retailer's margin. With 20%: ₹114.29 × 0.80 = ₹91.43.
- Take the stockist's margin off PTR. PTS = PTR − stockist's margin. With 10%: ₹91.43 × 0.90 = ₹82.29.
GST is then charged on top at each step: the chemist's bill shows ₹91.43 + 5% GST = ₹96.00, and the stockist's bill shows ₹82.29 + 5% = ₹86.40. The chemist sells at the MRP of ₹120, of which ₹5.71 is GST. A registered retailer who is not in the composition scheme can claim the GST paid on purchase as input tax credit, so the retailer's own margin is the price without GST less PTR: ₹114.29 − ₹91.43 = ₹22.86. A composition dealer can't claim that credit, so for them the GST on purchase is part of the cost.
Is 20% for the retailer and 10% for the stockist a rule?
No. It is a common convention, which is why the calculator uses it as the starting point and lets you change it. The All India Organisation of Chemists and Druggists (AIOCD), the chemists' and druggists' body, referred to minimum trade margins of 20% on MRP for retailers and 10% on PTR for wholesalers in a memorandum to NPPA (the National Pharmaceutical Pricing Authority), and asked for them to be raised (Free Press Journal, May 2022). Companies set their own trade margins, and they differ from company to company, product to product and scheme to scheme. Always follow the price list your company sends.
Two places where the government does set numbers:
- Price-controlled medicines. For a scheduled formulation, paragraph 4 of the Drugs (Prices Control) Order, 2013 works out the ceiling price by averaging the PTRs of brands in the market and adding a 16% margin to retailer, counted on PTR: ceiling price = average PTR × (1 + 16/100). The order defines "margin to retailer" as a percentage of price to retailer.
- Anti-cancer medicines. NPPA has capped trade margins on 137 non-scheduled anti-cancer medicines at 30% of MRP, with revised prices from 9 November 2026 (All India Radio News, October 2026). For these, use the company's revised price list.
Margin on the selling price or a mark-up: why it matters
The same "20%" gives two different PTRs depending on how it is counted:
| MRP ₹120, GST 5%, price without GST ₹114.29 | Margin on the selling price | Mark-up on the buying price |
|---|---|---|
| Retailer 20% | PTR = ₹114.29 × 0.80 = ₹91.43 | PTR = ₹114.29 ÷ 1.20 = ₹95.24 |
| Stockist 10% | PTS = ₹91.43 × 0.90 = ₹82.29 | PTS = ₹95.24 ÷ 1.10 = ₹86.58 |
| Retailer earns per unit | ₹22.86 (25% on PTR) | ₹19.05 (16.67% of the price without GST) |
The price-control order counts the retailer's margin as a mark-up on PTR; much of the trade talks about a margin on the selling price. When a company quotes "20% margin", check which one it means. Pick the matching option in the calculator and the numbers will agree with the price list.
What else changes the real margin?
- Schemes and free quantity. "10+1" free goods lower the real cost per unit: 11 units for the price of 10 is about 9% cheaper per unit.
- Cash and trade discounts on the bill lower the cost further.
- Expiry and breakage. Stock that expires before it sells wipes out the margin on that batch, unless it can be returned and the claim is settled.
- Rounding. Companies round PTR and PTS in their own way, so a price list can differ from this calculator by a few paise.
PTR and PTS in ValueSoft
ValueSoft keeps two sale rates, PTS and PTR, for every item, with MRP and batch. Enter a margin and it works out the sale rate automatically, also when you import supplier bills from CSV, Excel or PDF. Free quantity and several discount columns sit on the bill line, discounts can be fixed item-wise, party-wise or company-wise, and a warning appears when a sale's margin is too low. Profit reports show margin bill-wise, party-wise and company-wise, and claims with the company for breakage, expiry and schemes are tracked until settled. See pharma distributor billing software and pharma stockist software.
PTR and PTS on every bill line
Download the free demo or book a demo with our team. We'll show PTR/PTS rates, margin warnings and scheme billing on your own items.
Sources
- Department of Pharmaceuticals: Drugs (Prices Control) Order, 2013, as amended up to 25 May 2023 (definitions of maximum retail price, price to retailer and margin to retailer; paragraph 4, ceiling price)
- Free Press Journal (25 May 2022): AIOCD asks NPPA to reframe trade margins
- All India Radio News (19 October 2026): trade margins on 137 anti-cancer drugs capped at 30%
- GST Council / PIB: FAQs on the 56th GST Council meeting (medicines at 5% from 22 September 2025)
