Vat Registration

Dear All

can is use LIC policy as surety for VAT registration. There is one time payment of the policy

Please advice ASAP

Thanks

Manish

Please explain me 
"VAT liability does not depend on how much of value is added at what stage in the production and distribution process.there is thus , no incentive for companies to integrate vertically or for shunning specialization unlike under a regime of turnover tax or a sales taxthat makes no allowance for taxes paid at earlier stages."

I want to know the clear meaning of "incentive for companies to integrate vertically or for shunning specialisation................earlier stages".

please look into it plzzzzzzzzzzzzzzzzzzzzz