|
|  |
| |
|
| | The Art | Collectors | Investors Network is not currently active and cannot accept new posts | | Value Added Tax | Views: 400 | | Aug 10, 2008 8:43 am | | Value Added Tax | # |
Thomas | | Hi All, I was just wondering if the final customer of an arwork ends up spending twice on VAT for the same artwork..
Does the artist collect VAT from the Gallery? If so then this would be added to the price of the painting to the final customer and the gallery will again collect VAT from the final customer.....is this how it works, it sounds like double taxation. Any insights on VAT?Private Reply to Thomas | | Aug 10, 2008 9:29 am | | re: Value Added Tax | # | 
Lavesh Jagasia | | The artist is a professional and hence is not liable to charge or pay VAT.
Only the gallery or dealer registered with the VAT/Sales Tax dept. charges VAT and hence there is no chance of this tax being charged twice even in case of it being sold from one gallery/dealer to another the salient point of VAT is that it is always levied at the highest sales price and the VAT paid by the earlier gallery/dealer is received back in the form of an adjustment in the VAT/Sales Tax returns filed by the firm concerned. Hope this clarifies your doubts.Private Reply to Lavesh Jagasia | | Aug 10, 2008 11:10 am | | re: Value Added Tax | # | 
Porus Vazifdar | | VAT by its very name is a tax on the vaue added to a product by the relevant intermediary, and prevents double taxation. Take this example -
Artist A sells a work to Dealer D for Rs10,000/-. Dealer D further sells to Collector C for Rs.13,000/-. Assuming a VAT of 12.5% on this product and in the state of purchase and sale, VAT would be calculated at each stage as follows:
A would sell to D
Painting 10,000
VAT 1,250
-------
Total to D 11,250
=======
On collecting Rs11,250/- from D, A will pay Rs.1,250 over to the Government.
When D sells to Collector C, he would collect and pay VAT as follows:
Painting 13,000
VAT 1,625
------
Total To C 14,625
======
D would collect Rs1,625 as VAT from C and pay Rs.375 (Rs1,625-1,250) to the Government. He has already paid the balance of Rs.1,250 to A.
As a result the government would earn totally Rs1,625 as VAT from this transaction and as you can see there is no double taxation.
This is a simplistic example and various complications could arise dependent on the case at hand.
I've realised, in discussions wtih artists, that generally artists do not register themselves wtih VAT authorities and do not collect VAT. If they, indeed, need to register and collect, then they should act accordingly.Private Reply to Porus Vazifdar | | Aug 11, 2008 7:26 am | | re: re: Value Added Tax | # |
Thomas | |
Thanks both of you for the detailed reply.
ThomasPrivate Reply to Thomas | | Aug 18, 2008 8:05 am | | re: re: re: Value Added Tax | # | 
Sonali Engineer | | what Porus said is applicable only in case of paintings - sculpturos working in various mediums who have production units or studios where he employs people often have to pay VAT and are registered - its a bit complicated and on case basis one must consult ones CA so that no penalties are levied.
sonali Private Reply to Sonali Engineer | | |
| |
| |
