As per the GST Composition Scheme Rules & Proviso,
One Can not collect the Extra Tax or GST from the Customer or the Consumer. and he can not take the Input Credit on Purchases as well.
How Ever the Same is not appplicable for MRP Products. If a Super Market Registered Under Composition Scheme and Collecting MRP Price on products is a Valid Practice and its not against the Composition Schemes Priviso.
The Supplier or the Super Market in the Last Example Has to Pay the Tax @ 1% on the Turnover (i.e MRP ) GST of 1 % is an Additional Tax Payable to Goverment.
Yes Its a Double taxation Issue. But 1 % on Total Purchases is a Nominal Amount compared to Normal Tax Rates. Hence Govt Silent about this Cascading Effect.