In Brief
The State of Gujarat challenged the Tribunal and High Court's decision that value added tax (VAT) and the value of purchases for which no tax credit was claimed must be excluded from the computation of taxable turnover under Section 11(3)(b) of the Gujarat Value Added Tax Act, 2003. The Supreme Court affirmed the lower courts. It held that the statutory definition of 'purchase price' is exhaustive, expressly mentioning only duties under the Central Excise Tariff Act and Customs Act—not VAT. Therefore, VAT and unclaimed purchases cannot be included in calculating the taxable turnover, and both components must be excluded when reducing tax credit.
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