Additional VAT on Discounted Products

Location/place: Bangalore

Name of company/service: Shopper Stop and Lifestyle

Hi, I would want to know if my understanding is correct on VAT. Every year, big retailers like Shoppers Stop and Lifestyle offer discount sale period. However, from last sale, these outlets are charging 5% VAT additional on the discounted price.
Firstly, the price tag says (for example) product MRP 1999.00 (Inclusive of all taxes) and offer 50% discount.

My understanding is that I should just pay INR 1000.00 and take the product. However I am now charged 1000.00 + 5% VAT = INR 1050.00.

I feel that if the discount is on MRP, I should not be paying any additional 5% VAT.

Please let me know if the additional VAT charging is correct so I can go back to the store and speak to them for a refund.

Thanks and Regards,
Santosh . C