Gross value added at producers’ prices is defined as output valued at producers’ prices less intermediate consumption valued at purchasers’ prices.

As already explained, in the absence of VAT, the total value of the intermediate inputs consumed is the same whether they are valued at producers’ or at purchasers’ prices, in which case this measure of gross value added is the same as one that uses producers’ prices to value both inputs and outputs. It is an economically meaningful measure that is equivalent to the traditional measure of gross value added at market prices. However, in the presence of VAT, the producer’s price excludes invoiced VAT, and it would be inappropriate to describe this measure as being at “market” prices.

System of National Accounts 2008