Art Tax

The art community fears that GST will hit the already struggling art market

Written by Vandana Kalra | Published:May 20, 2017 6:05 am
From India Art Fair earlier this year Express archive

The Goods and Services Tax (GST) Council that met in Srinagar has declared tax slabs and cesses for more than 1,000 items, and among them is art — a category that till now was exempted from VAT in some states, including West Bengal. In Rajasthan, the tax was much lower. The tax reform has listed it under the tax bracket of 12 per cent, including, among others, “paintings, drawings and pastels”, “original engravings, prints and lithographs”, “original sculptures and statuary in any material” and “antiquities of an age exceeding 100 years”.

The declaration will make the tax structure uniform across India. The reform, the art community fears, will hit the already struggling art market where sales have been low. “The market has been particularly bad after demonetisation, with limited liquid funds, and now this tax will make things more difficult,” says Vikram Bachhawat, director of Kolkata-based Aakriti Art Gallery, that also has a branch in Delhi. He adds, “In a 2003 ruling, the West Bengal High Court had exempted art from VAT so it should not come under GST either.”

Kishore Singh, President of DAG Modern, notes that the tax reform will impact not just the more high-end artwork that sells through galleries but also artists who work at the base level, and for whom the 12 per cent might mean even lower sales and affect their livelihood. “The world of art that we see as the dominant art world is actually a minuscule part. The galleries, auction houses and players represent the voices of the larger art world, the people in the fringes who are actually the bulk, including folk artists, struggling artists, assistants and so on will be impacted. We, in Delhi, were already paying VAT, and therefore much hasn’t changed for us, but it’s their voices that need to be heard. We haven’t been successful till now but the attempt will continue,” says Singh.

While Arun Vadehra, Director of Vadehra Art Gallery, shares that efforts had been made to reach out to the Ministry of Culture earlier, he notes that the art community will approach the Ministry again in the wake of the announcement. “We need to understand that bulk of the art market belongs to the one-five lakh segment, and an additional 12 per cent on that is substantial,” says Vadehra. He adds, “China had given art a 10-year holiday on all taxes, as a result more than 3,000 auction houses opened there. In India, entrepreneurship in art is really discouraged, and I don’t know why.” Bachhawat adds, “We will put a petition before the government and hope our plea is considered.”

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  1. H
    H N Ghiya
    May 30, 2017 at 7:10 am
    Imposing heavy tax on art works under GST is unfortunate for India. Our country is known for its artistic and cultural heritage. Government may consider either zero or a bare minimum tax rate on art works under GST in order to encourage the trade of art works.
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      Rajendra Director India Art Festival
      May 20, 2017 at 3:24 pm
      Very good that media and art fraternity is taking initiative to keep art out of GST net. Already rural artists bear high cxhibition cost in public gallery spaces. Private galleries showcase only able names as they have huge overheads. This leaves 90 independent artists outside private gallery circuit and only exhibit in public galleries by paying rent. If they don't sell its double loss for them. Government must think at least for artists community that GST should not be imposed on art or at least keep it in lowest slab. Not only art but allied services in art world like fine art colours, framing, exhibition services should have lowest GST slab. When progress of any civilization is studied first their art is researched. However government does not pay much attention on development of Art infrastructure. China our neighbour had overtaken US in global art and antique market share of 32 ....this is because of tax exemption on Art. Govt should think on these lines and benefits
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        Ritendra Roy
        May 20, 2017 at 3:06 pm
        This is like implementing GST on one's creativity. Someday we might see the same for new born babies. Would be a good idea for checking population growth.
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          Chhatrapati Dutta
          May 20, 2017 at 2:02 pm
          The implementation of GST on such a miniscule section of its creative population, would not only be an act of gross injustice, it will only reveal the ignorance and grave insensitivity of a people who fail to realize the actual value of their own treasures.
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            Aakriti Art Gallery
            May 20, 2017 at 2:08 pm
            Very well said Chhatrapati.
            Reply