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.”

http://indianexpress.com/article/business/economy/art-tax-gst-cess/Art Tax