Tax invoice
This query is : Resolved
CMA Ramesh Krishnan
(Expert)
17 July 2013
What is the Lumpsum dealer? and which state VAT
26 July 2025
Yes, a **Tax Invoice** can be issued to a **Lump Sum Dealer** (also called a Composition Dealer under VAT laws).
However, here are some important points to note:
* **Composition Dealer** usually pays tax at a fixed rate on turnover and does **not** claim input tax credit.
* When you sell goods to a Lump Sum/Composition Dealer, you **can issue a tax invoice**, but it should mention that the buyer is a composition dealer and no input tax credit is available on this purchase.
* The invoice format and the tax rate applied should be as per the applicable VAT law and rules.
* In some states, sellers issuing invoices to composition dealers have to mention the composition scheme registration number and other details.
---
**Summary:**
* Tax invoice **can be issued**.
* Mention clearly that buyer is a **composition dealer**.
* No input credit on such purchases.
* Tax charged at applicable VAT rates or composition scheme rates.
---
However, here are some important points to note:
* **Composition Dealer** usually pays tax at a fixed rate on turnover and does **not** claim input tax credit.
* When you sell goods to a Lump Sum/Composition Dealer, you **can issue a tax invoice**, but it should mention that the buyer is a composition dealer and no input tax credit is available on this purchase.
* The invoice format and the tax rate applied should be as per the applicable VAT law and rules.
* In some states, sellers issuing invoices to composition dealers have to mention the composition scheme registration number and other details.
---
**Summary:**
* Tax invoice **can be issued**.
* Mention clearly that buyer is a **composition dealer**.
* No input credit on such purchases.
* Tax charged at applicable VAT rates or composition scheme rates.
---
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