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The White Paper
35. However, for the purposes of the present appeal what is significant is a White Paper of state level value added tax prepared by the Empowered Committee of State Finance Minister dated 17 th January 2005 which formed the basis for the change system of taxation under the VAT. A copy of the White Paper has been shown to the Court. The 'Preface' to the White Paper explains the rationale for the uniform system of the VAT which was to avoid unhealthy competition and have certain features of VAT common to all the States. The said features were to constitute the basic design of VAT. It was expected that at the same time, the States would have freedom for appropriate variations consistent with the basic design. The White Paper was a collective attempt of the States to strike a balance between this need for commonality and the desired federal flexibility in the VAT structure.