ITC on composite supplies

Composite dealers are not allowed to collect tax, i.e. a person who purchases from a composite dealer should not pay any taxes to him. Question to be re-worded.

If you meant why cannot a composite dealer avail credit, the reason is because he is allowed a concessional rate of tax, and is applicable only for small dealers with limited turnover and transactions. 

If you want to enable ITC claim, suggest to register as a regular tax payer and follow compliances.

Hope this helps.