The categorization of a dealer as first stage or second stage is not predefined. It is decided during the purchase. Therefore, a dealer may be a first stage dealer or a second stage dealer depending on the type of purchase.
Assume you are a First Stage Dealer and you buy the goods from the importer or Manufacturer.
The Invoice issued on sale of goods to the Manufacturer or Second Stage Dealer has to indicate the amount of Excise Duty passed on or proportionate value to the excise of the goods being sold.
Let us assume that you are a Second Stage Dealer and you purchase goods from a First Stage Dealer.