Time of Supply for transaction between artist and gallery

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This discussion explores the time of supply for paintings provided by an artist to a gallery. The consensus leans towards treating this as a supply of goods, specifically under heading 9701, with the time of supply being the point of sale to the customer. This is contingent on the agreement that the gallery holds the paintings for display only, with ownership remaining with the artist until a sale occurs. If unsold, the paintings are returned to the artist.

Mohil Shah

Mohil Shah (Querist)

08 April 2020 What would be the time of supply in case a painter gives his paintings to a gallery. If the painting is sold the gallery keeps a certain sum for itslef and the rest is given to the painter, and if it is not sold then the painting is given back to the painter. The gallery only recognizes an income if a painting is sold. It doesn't charge a commission for only displaying the painting.
How should the transaction between the painter & the gallery be recognized ?
Is it a supply of goods or services? Should it be treated on Goods on Approval Basis?
Please suggest regarding the same.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

09 April 2020 It will fall under supply of service. Time of supply will the sale of painting.

CA Suresh Jain

CA Suresh Jain (Expert)

10 April 2020 This will be supply of Goods fall under heading 9701. The time of supply is sale of the painting to the customer subject to agreement with the Gallery that the painting is received by them for display and the ownership of the painting remains with the artist.

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