Mrp and vat

VAT as the name says is tax on the value added. Eg: Manufacturer sells to distributor @rs.100 10% payable. Tax paid by Manufacturer =Rs.10.
Distributor sells @Rs.200 then here the value added is Rs.200-100= Rs.100. Tax payable =rs.200*10% =20 - 10(already paid by manufacturer) total tax payable by distributor = Rs. 10.
M.R.P stands for maximum retail price. This is the final price and no sale can be made over and above this rate. M.R.P is inclusive of all costs and every tax applicable.