VAT turnover excludes State-paid differential amounts not forming part of the sale price in molasses transactions.

Amounts received from the State that are separate from the invoiced sale consideration for molasses do not form part of the sale price and cannot be included in taxable turnover under the Punjab VAT regime. VAT is charged on turnover, so only sums actually constituting sale price are assessable; a later or independent payment not linked to the buyer-facing invoice falls outside the tax base. The Tribunal's view that the differential amount was not liable to VAT was upheld, and the Revenue's challenge failed.

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Issues: Whether the differential amount received from the State on sale of molasses formed part of the sale price and was liable to be included in turnover for levy of VAT under the Punjab Value Added Tax Act, 2005.

Analysis: The assessee had issued invoices and discharged tax on the actual sale consideration. The additional amount received from the State was not shown to be part of the sale price, and no invoice had been raised for that difference. Under the charging scheme of the Act, VAT is levied on turnover, and only amounts forming part of the sale price can be included in turnover. A payment received separately from the State, not connected with the sale price charged to purchasers, cannot be added to taxable turnover.

Conclusion: The differential amount was not liable to VAT and could not be included in turnover. The finding of the Tribunal was upheld, and the Revenue's appeal failed.

Ratio Decidendi: Amounts received from the State that do not form part of the sale price cannot be treated as part of turnover for levy of VAT.

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