Tax applicability on art work like painting, sculptures

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CA Vishal Moole (Querist)

02 September 2012 Can any body tell me what is the Tax applicability on Art work like Paintings, sculptures, etc. may be of professional artist possessing qualifying degree or not, ??? i mean on such work whether it is considered as Taxable service n taxed under Service Tax or whether it wd b treated as Manufacture (as such thing fulfills the conditions of movability & Marketability) so Excise duty ll b applicable, n if so then whether VAT is applicable or Woks contract tax would be applicable (both Service Tax n VAT wth reduced %)????
& if Service Tax is applicable then while purchasing such arts/paintings/sculptures to keep them into commercial premises as showpiece or else by Assessee (on whom Tax Audit provisions r applicable) needs to deduct TDS u/s 194J ????

MJ Krishnamurthy

MJ Krishnamurthy (Expert)

02 September 2012 Mr Vishal Moole,
Making art works is a process of manufacturing ,and so,Excise duty and VAT are applicable. As it has been taken as manufacturing by Excise department it can not be a works contract. Service tax is not applicable,because it is only a sale........MJK

CA Vishal Moole

CA Vishal Moole (Querist)

04 September 2012 Thank you sir,

bt while searching d same query, i found that some corporate assessees are deducting TDS u/s 194J while making the payment, which means its a Professional service, so service tax wd b applicable, but as per ur stand if its sale then it will never attract to 194J,

Sunil

Sunil (Expert)

09 October 2012 Service Tax is not leviable on transfer of title to goods. The painting is goods and therefore if you are transferring the title permanently to the other person, there is no service tax.

If you own the painting or are even the original artist and you give the painting to someone to display for a short period and charge him for it, then it is a declared service and accordingly taxable.

If you call an artist and ask him to do his painting or sculpture on your wall, then it is a service for a consideration and taxable as the wall belongs to you at all times and he is doing his service of making his painting on your wall or article.

Usually an artist sells his paintings through an art gallery that acts as a consignment agent. The title of the painting never transfers to the art gallery. Therefore The artist receives a consideration that is for transfer of title of goods to the ultimate buyer and that is a sale. The commission the art gallery retains is taxable for service tax.

Only original copyright of something intangible is exempt as they are not in physical form like music, literary work (book) even though they may be stored on media. The media is just a storage device and would not be qualified to be goods. But when the person acquiring the work from the original further transfers the right to someone else to reproduce in form of goods (CD's, Books etc) then it is service tax and selling it in form of books or cds etc. is goods.

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