Tax on Artisans and Craftsmen

[Guest]

Hi,

If an artisan creates some handicrafts and sells them to a dealer (for resale), is s/he liable for CST(interstate) or VAT(within state)?

In the above case, if the sale is made to the end customer (not for resale) what can be the tax liability?

Thanks

 

[MANDAVILLI RAMAKRISHNA]

this is small question. every person who is selling is a dealer as per VAT Act and to pay tax on goods sold.

but no tax to be paid until the dealer/ seller crosses the limit prescribed 

under the VAT act.  in AP it is 10 lacs.??

VAT has mechanism to get tax on the goods sold at the next point when the previous point no tax is paid.  the second seller has to pay tax and shall not take any tax input. 

So artisans can charge less as they are not charging VAT

[Guest]

Thanks for the response!

Actually, I wanted to understand if the Government is supporting the small craftsmen and artisans through tax benefits. I did the research and it isn't. Though, handicrafts themselves are exempted in many states.

AI Summary

Dealer classification under VAT determines artisan registration and tax liability when turnover exceeds the statutory threshold. Artisan liability depends on classification as a dealer and whether turnover exceeds the statutory registration and taxable-turnover threshold; artisans below the threshold need not charge VAT, sales to dealers for resale are subject to VAT/CST rules, subsequent purchasers must account for tax where prior sellers were exempt and cannot claim input tax credit, and product-level exemptions for handicrafts in some states are separate from turnover-based relief.