Set Pricing group to override list for pricing calculation
Menu Path: Admin > System Settings > Business Rule > Transactions > Pricing and Others
Note: When "Pricing group to override list price for price calculation" is checked, the discount is applied to the price defined for a specific pricing group.
When unchecked, the discount is applied to the product's base sales price.
Mark checked the "Pricing group to override the list price for the price calculation
Use case for "Product-1": List price is $100.00 and Pricing Group Level1 price is $90.00. A Pricing rule for Pricing Group Level 1 Customers is defined with a 10% discount on the list price.
When the "Pricing group to override list price for price calculation" is checked 10% should apply to $90.00 which is a level-1 pricing group. If it is unchecked, 10% should apply to $100.00 which is the list price