Compounded tax turnover cannot be reduced by excluding a closed branch's prior-year turnover under Kerala VAT.

Compounded tax under section 8(f)(i) of the Kerala Value Added Tax Act is computed on annual turnover, and the provision does not allow a dealer to split the business into branches to reduce that base. Explanation 3 only confirms liability for branches existing in the relevant year; it does not permit exclusion of the turnover of a branch closed on the last day of the previous financial year. A special adjustment in Explanation 8 applied only for 2010-11 and had no application to later years. On that basis, the turnover of the closed branch could not be excluded for 2012-13.

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Issues: Whether a dealer opting to pay compounded tax under section 8(f)(i) of the Kerala Value Added Tax Act, 2003 can exclude the turnover of a branch closed on the last day of the previous financial year while computing the compounded tax payable for the next financial year.

Analysis: The charging provision is section 6, while section 8 provides the optional system of payment at compounded rates. Under section 8(f)(i), compounded tax for dealers in ornaments and similar goods is determined on the basis of annual turnover. The provision does not permit a classification of the dealer's establishment into branches for the purpose of reducing the turnover base. Explanation 3 makes it clear that dealers opting under that clause are liable to pay compounded tax in respect of their branches existing in the relevant year, but it does not authorise splitting up or proportionate reduction of the annual turnover of the previous year. Explanation 8, which made a special provision for 2010-11, was not applicable to subsequent years.

Conclusion: The dealer was not entitled to exclude the turnover of the closed branch for the purpose of computing compounded tax for 2012-13. The writ appeal was liable to be dismissed.

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