The seat was earlier held by Congress.
Parmar defeated Barad by a thin margin of 2,440 votes, Gir-Somnath Collector Ajay Kumar announced after the counting ended this afternoon.
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The by-election was necessitated after Jasu Barad, the Congress MLA from the constituency, passed away in January.
Around 63 per cent voter turnout was registered during the polling held on May 16.
While the Congress gave ticket to Jasu Barad's younger brother, Bhagwanji Barad, BJP fielded Parmar, who had won the Talala seat in 2002.
This was the the second face-off between Bhagwanji Barad and Parmar as they had contested against each other on the same seat in the 2007 Assembly polls. Barad had then defeated Parmar.
Earlier, Parmar had won the 2002 Assembly election defeating Jasu Barad. Later, Jasu Barad defeated Parmar in 2012 Assembly polls with a thin margin.
After winning the polls, Parmar thanked party workers as well as voters. He also promised to solve the problems faced by people.
Gujarat BJP President Vijay Rupani claimed the win was an indication that the party will win the 2017 Assembly polls in the state.
He also claimed that the Patel quota agitation, which created anti-BJP sentiments among Patel community, did not affect the party's performance in Talala.
"This seat was held by Congress and we snatched it from them today. It is an indication that BJP will win with huge majority in 2017," Rupani said.
"Though some Patel quota agitators did canvas against BJP, the Patel voters remained by our side as they are happy with BJP-led Gujarat government's announcement of 10 per cent EBC quota and other pro-people policies," he added.
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