GST on Sale of Ancestral Paintings

[deepak gulati]

An unregistered salaried person is selling his Ancestral Paintings for Rs. 45 lakhs in the open market.

The question is whether GST will be leviable on these paintings or not.

[Sadanand Bulbule]

Dear 

Looking at the situation explained by you, even such person does not fall under the category of " casual taxable person" which is defined as under:

Section 2(20) “casual taxable person” means a person who occasionally undertakes transactions involving supply of goods or services or both in the course or furtherance of business, whether as principal, agent or in any other capacity, in a State or a Union territory where he has no fixed place of business;

Reading by the above definition, essentially such transactions should be in the course or furtherance of business. Obviously this essentiality is missing here. Therefore in my opinion, sale of ancestral paintings for Rs. 45 lacs is not taxable. Still double check with experts.

[KASTURI SETHI]

Dear Querist,

(i) The unregistered salaried person's transaction is out of the definition and scope of the term, 'business' as defined under Section 2 (17) of CGST Act, 2017. That person is not engaged in purchase and sale of old and used paintings or antique works of art. Hence GST is not leviable. Old and used paintings are classified under 9701 (HSN)

(ii) Hence I support the views of Sh.Sadanand Bulbule, Sir.

(iii) For more knowledge of the issue, please go through the following decision of AAR, Maharashtra :-

2022 (5) TMI 1183 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA - IN RE : SAFFRON ART PVT. LTD.

[VENU K]

I support the views of the experts.

In case of sale of gold by individuals , the department itself had accepted that such sale was not liable for Reverse Charge because the individual selling gold was  not in the business of purchase and sale of gold. This clarification was made in the early days of GST when everything was liable for Reverse Charge.

[Shilpi Jain]

Beware! As per department's view, the definition of business is very wide and they would consider even a one off transaction as business. So if there is a possibility do collect and pay tax.

[Sadanand Bulbule]

What is the legal position on this rathan than  the view of the department? Can you highlight it madam? 

[Sadanand Bulbule]

Why the buyer should suffer the torture of GST @ 12% when it is legally not needed? 

[VENU K]

Let us stand in alignment with the law is my opinion. GST is a law which recognises plenty of  Rights,Remedies and Safeguards for the  tax payer. If you have confidence in law, you will surely get relief eventually.

But one must also recognise that GST litigation is not a twenty twenty match where you can go home with a result in a matter of few hours.It is a test match where you need to understand the pitch conditions on day five and take a decision on day one as to whether to field or bat.

[Brijesh Verma]

The definition of the term business is extremely wide. 

(17) “business” includes––

(a) any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit;

(b) any activity or transaction in connection with or incidental or ancillary to sub-clause (a);

(c) any activity or transaction in the nature of sub-clause (a), whether or not there is volume, frequency, continuity or regularity of such transaction;

[KASTURI SETHI]

It is neither the intention of legislature nor the Govt.to tax SUCH  sale. 

[Sadanand Bulbule]

Dear all

Many a times, people sell old jewellery exceeding threshold limit for registration to meet marriage expenses or construction of home or hospital expenses etc. Then are they required to pay GST?

What is the logic to suggest to pay GST on safer side or deciphering the definition of business on such exigencies?

This is something shocking to the common man.

Law involves both head and heart. Law makers are not that cruel to suck blood (tax) from the common man. And they should not be too.

[KASTURI SETHI]

Sh.Sadanand Bulbule Ji,

Sir, Your views are full of reason, logic and legal force. I am of the firm view that the old and used domestic goods cannot conform to the definition and scope of the term, 'business' as defined and explained in Section 2 (17) of CGST Act. The difference of the terms, 'domestic' and 'business' is very much clear and the word, 'domestic' does not find place in the above definition of 'business'.

[KASTURI SETHI]

Both term, 'business' and 'domestic' extremely go in opposite directions. 

AI Summary

GST Not Applicable on Sale of Ancestral Paintings by Unregistered Salaried Individual per CGST Act, 2017 An unregistered salaried individual selling ancestral paintings for Rs. 45 lakhs queried about the applicability of GST. Experts in the discussion agreed that GST is not applicable as the sale does not fall under the definition of 'business' or 'casual taxable person' as per the CGST Act, 2017. The transaction is not in the course or furtherance of business, as the individual is not engaged in the regular sale of such items. Some participants cautioned about the broad interpretation of 'business' by tax authorities but emphasized that the sale of personal goods should not attract GST.